Option payoffs: What is the payoff for a call option with a strike price of $30 if the underlying stock price at expiration is $25?

Question

Quizplus · Accepted Answer

The payoff for a call option with a strike price of $30 if the underlying stock price at expiration is $25 is zero because the call option holder would not exercise their option to buy the stock at a higher price than the current market price. Therefore, the correct answer is D – none of the above.

Option Payoffs: What Is the Payoff for a Call Option