The Maximum Loss a Buyer of a Stock Call Option

question 72

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.
• E) None of the options are correct.

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Definitions:

Critical Thinking

Carefully analyzing and valuating a concern with the intention of deciding on a standpoint.

Holistic Critical Thinking

An approach to critical thinking that considers the whole context, including relationships, background, and environment, instead of just parts.

Scoring Rubric

A set of criteria and standards used to evaluate and grade an assignment, performance, or project, often providing detailed feedback.

Unacceptable

Not satisfactory or tolerable; not meeting required standards or norms.