At What Point Is the Payoff from Owning a Call

question 61

Multiple Choice

At what point is the payoff from owning a call option on a stock greater than the payoff from owning the stock itself?

• A) When stock price exceeds strike price at expiration
• B) When strike price exceeds stock price at expiration
• C) When stock price equals strike price at expiration
• D)Call payoff never exceeds stock payoff.

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Definitions:

Rational-Emotive Therapy

A form of cognitive-behavioral therapy that focuses on changing irrational beliefs and thought patterns that contribute to emotional or behavioral issues.

Stress Inoculation Training

A psychotherapy method that helps individuals prepare themselves in advance to handle stressful events successfully and with less distress.

Short-Term Psychodynamic Therapy

A therapeutic approach that seeks to uncover unconscious patterns and meanings in current psychological processes over a brief period.

Relational Psychoanalytic Therapy

A form of psychodynamic therapy that considers therapists to be active participants in the formation of patients’ feelings and reactions and therefore calls for therapists to disclose their own experiences and feelings in discussions with patients.