Assume That a Call Option Has an Exercise Price of $1.50/£

question 56

Multiple Choice

Assume that a call option has an exercise price of $1.50/£. At a spot price of $1.45/£, the call option has:

• A) a time value of $0.04.
• B) a time value of $0.00.
• C) an intrinsic value of $0.00.
• D) an intrinsic value of -$0.04.

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Definitions:

Desired Behavior

Behaviors that are encouraged or aimed for within a particular context, often shaped by expectations, goals, or cultural norms.

Immediate Reinforcement

The prompt provision of a reward or punishment following a behavior, aimed at influencing future behaviors.

Reinforcer

Anything that strengthens or increases the likelihood of a specific response or behavior by providing a consequence an individual finds rewarding.

Desired Behavior

Specific actions or reactions that are sought after in a particular context, often related to achieving certain goals or standards.