If the Owner of a Call Option with a Strike

question 82

Multiple Choice

If the owner of a call option with a strike price of $35 finds the stock to be trading for $42 at expiration, then the option:

• A) expires worthless.
• B) will not be exercised.
• C) is worth $7 per share.
• D)cost too much initially.

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Definitions:

Sympathy

Feelings of pity or sorrow for someone else's misfortune, often leading to supportive or compassionate actions.

Belief in a Just World

The cognitive bias that assumes people get what they deserve, leading to a rationale for misfortune and suffering.

Empathy-Altruism Model

The idea that the reason people help others depends on how much they empathize with them. When empathy is low, people help others when benefits outweigh costs; when empathy is high, people help others even at costs to themselves.

Empathy Gap

The difficulty in understanding or predicting the preferences, behaviors, or feelings of those who are in a different emotional or physical state.