You Own a Call Option on a Stock and the Strike

question 88

Multiple Choice

You own a call option on a stock and the strike price of the option is $30.The option has 3 weeks until expiration and the stock is currently priced at $35 per share.What is the largest payout possible for this call option? Ignore the original cost of the option for the payout calculation.

• A) $0
• B) $5
• C) $30
• D) there is an unlimited possible payout on this option

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Definitions:

Cell

A single unit that converts chemical energy into electrical energy.

No-Load Voltage

The voltage of an electrical device or circuit when no load is connected, representing its maximum voltage output.

Internal Resistance

The resistance inherent to a power source.

Cell

The basic structural, functional, and biological unit of all living organisms, or a device that converts chemical energy into electrical energy in a battery.