Option Payoffs: What Is the Payoff for a Call Option

question 88

Multiple Choice

Option payoffs: What is the payoff for a call option with a strike price of $45 if the underlying stock price at expiration is $75?

• A) $30
• B) $45
• C) $75
• D) None of the above

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Definitions:

Investment Turnover

A financial ratio that measures the efficiency of a company's use of its investments in generating sales revenue.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Profit Margin

The ratio of net income to revenue, indicating how much profit is made on average from sales.

Authority

The authority or capability to issue commands, make choices, and ensure compliance.