At Expiry,a Call Option Is Worth

question 57

Multiple Choice

At expiry,a call option is worth:

• A)the maximum of the exercise price minus the share price and zero.
• B)at least the exercise price.
• C)at least the share price.
• D)the maximum of the share price minus the exercise price and zero.

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Definitions:

Cash Dividends

Payments made by a corporation out of its earnings to its shareholders, usually in the form of cash.

Stock Dividends

A payment made to shareholders in the form of additional shares, rather than cash.

Stockholders' Equity

Funds owned by the shareholders of a company, calculated as the company's total assets minus its total liabilities, representing ownership interest in the company.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company’s profits via dividends.