The Maximum Loss a Buyer of a Stock Call Option

question 46

Multiple Choice

The maximum loss a buyer of a stock call option can suffer is equal to

• A)the striking price minus the stock price.
• B)the stock price minus the value of the call.
• C)the call premium.
• D)the stock price.

---

Definitions:

Fixed Exchange Rates

A system where the value of a country’s currency is pegged at a set rate to another currency or a basket of currencies.

Foreign Exchange Market

A global decentralized or over-the-counter market for trading currencies, determining exchange rates for every currency.

U.S. Dollar

The United States' official money, commonly utilized worldwide as a standard and reserve currency.

Depreciates

Describes how an asset loses value over time due to wear and tear, age, or obsolescence.