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]

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Definitions:

Action Potential

A sudden, temporary reversal of the electrical charge across a cell membrane, which travels along neurons to transmit signals.

Sodium

A chemical element with the symbol Na, essential for many bodily functions, including the regulation of blood pressure and fluid balance.

Potassium

A chemical element with symbol K, essential for various cellular processes including the regulation of heartbeat and muscle function.

Tetrodotoxin

A potent neurotoxin found in pufferfish and some other marine species that blocks nerve conduction by inhibiting sodium ion channels.