The Value of a Call Option Just Prior to Expiration

question 58

Multiple Choice

The value of a call option just prior to expiration is (where V is the underlying asset's market price and X is the option's exercise price)

• A) max [0, V - X].
• B) max [0, X - V].
• C) min [0, V - X].
• D) min [0, X - V].
• E) max [0, V > X].

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Definitions:

Negative Reinforcement

A type of operant conditioning that involves the removal of an unpleasant stimulus to increase the likelihood of a behavior being repeated.

Dull His Feelings

"Dull His Feelings" suggests an attempt to numb or suppress one's emotional responses, often through the use of substances or other coping mechanisms.

Schedule of Reinforcement

A rule or plan for determining the timing and frequency of reinforcement (rewards or punishments) in order to modify behavior.

Fixed Interval

A reinforcement schedule that rewards a response only after a specified time has elapsed, leading to a pattern of response following the reinforcement.