The Value of a Call Option at Expiration Will Be

question 46

Multiple Choice

The value of a call option at expiration will be equal to the maximum of zero or the:

• A) stock price.
• B) exercise price.
• C) stock price minus the exercise price.
• D) exercise price minus the stock price.

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Definitions:

Quarterly Dividends

Dividends paid by a corporation to its shareholders at regular intervals every three months.

Dividend Yield

The annual dividend a company provides vis-a-vis its stock price, presented as a financial ratio.

Dividend Income

Income received from owning shares in a company that pays dividends to its shareholders.

Shares

A unit of ownership in a company or financial asset that represents a proportion of the corporation's capital.