The Value of a Call Option Just Prior to Expiration

question 65

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]

---

Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services, used for cost allocation and operational planning.

Standard

A level of quality or achievement, especially one that is used as a point of reference.

Budget

An estimation of revenue and expenses over a specified future period of time, used by organizations for planning and controlling their financial resources.

Standard Cost

A predetermined cost of manufacturing, selling, or administering each product or service, used as a benchmark to measure performance.