If You Know That a Call Option Will Be Profitably

question 59

Multiple Choice

If you know that a call option will be profitably exercised then the Black-Scholes model price will simplify to _______.

• A) S₀ - X
• B) X - S₀
• C) S₀ - PV(X)
• D) PV(X) - S₀

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Definitions:

Motor

A machine, especially one powered by electricity or internal combustion, that provides motive power for a vehicle or for some other device with moving parts.

Wound-Rotor Induction Motor

A type of induction motor where the rotor has windings connected to slip rings, enabling variable resistance to be inserted in the rotor circuit for speed control.

Starting Torque

The initial torque produced by a motor or engine upon starting, critical for overcoming inertia and commencing rotation.

Starting Current

The initial surge of current experienced when an electric motor starts, typically much higher than the running or nominal current.