A call option on a stock has an exercise price of $14.If the stock price at expiration is $13.50,what is the option payoff for a long call position?
A)$0.50
B)$0
C)-$0.50
D)$13.50
E)$14

Question

Quizplus · Accepted Answer

The option payoff for a long call position is calculated as the difference between the stock price at expiration and the exercise price (if this difference is negative, the payoff is zero). 
In this case, since the stock price at expiration is lower than the exercise price, the difference is negative and the option expires worthless. Therefore, the option payoff is zero.

A Call Option on a Stock Has an Exercise Price