What Is the Payoff of a Call Option (Bought)with an Exercise

question 46

Multiple Choice

What is the payoff of a call option (bought) with an exercise price of $15.00,if the underlying share price is $16.50,at the expiry date of the option?

• A)$15.00
• B)Zero
• C)$1.00
• D)$1.50

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Definitions:

Countersink

A conical-shaped recess around a hole often used to allow the flat head of a screw or bolt to sit flush with or below the surface of the material.

Plug Weld

A weld made in a circular hole in one member of a joint fusing it to the surface of another member.

Weld Symbol

A standardized symbol on technical drawings specifying the type, location, and details of welds required for joining pieces of metal.