Pay-off diagrams for a call options versus stock prices are called:
A) vertical tower diagrams.
B) hockey stick diagrams.
C) fulcrum diagrams.
D) cumulative frequency diagrams.

Question

Quizplus · Accepted Answer

Pay-off diagrams for call options versus stock prices are commonly referred to as hockey stick diagrams due to their shape, which resembles a hockey stick. The diagram shows a flat line representing the option's premium until the stock price exceeds the strike price, at which point the line slopes upward, illustrating the increasing profit.

Pay-Off Diagrams for a Call Options Versus Stock Prices Are