A Stock Is Currently Selling for $70 Per Share and Its

question 62

Multiple Choice

A stock is currently selling for $70 per share and its call option has a $90 exercise price.What is the lower limit on the value of the call option?

• A)($20)
• B)0
• C)$10
• D)$20 Lower limit on value of call option = max [0,(stock price - exercise price)]
• = max [0,(70 - 90)]

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