Which of the Following Expressions Represents the Value of a Call

question 36

Multiple Choice

Which of the following expressions represents the value of a call option to its holder on the expiration date?

• A) S_T − X if S_T > X, 0 if S_T ≤ X
• B) − (S_T − X) if S_T > X, 0 if S_T ≤ X
• C) 0 if S_T ≥ X, X − S_T if ST < X
• D) 0 if S_T ≥ X, − (X − S_T) if S_T < X

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