Consider the Graph of a Call Option Shown at Right

question 64

Multiple Choice

Consider the graph of a call option shown at right. The option is a three-month American call option on €62,500 with a strike price of $1.50 = €1.00 and an option premium of $3,125. What are the values of A, B, and C, respectively?

• A)A = -$3,125 (or -$.05 depending on your scale); B = $1.50; C = $1.55
• B)A = -€3,750 (or -€.06 depending on your scale); B = $1.50; C = $1.55
• C)A = -$.05; B = $1.55; C = $1.60
• D)none of the above

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