The Lowest Value a Call Option Can Have Is

question 46

Multiple Choice

The lowest value a call option can have is:

• A) zero, because it is a limited liability instrument.
• B) S_T, because the basis of value is the stock price.
• C) S_T - 0, because it is a limited liability instrument.
• D) X - S_T, because the exercise price is the hurdle.

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