If the owner of a call option with a strike price of $35 finds the stock to be trading for $42 at expiration, then the option:
A)expires worthless.
B)will not be exercised.
C)is worth at least $7 per share.
D)cost too much initially.

Question

Quizplus · Accepted Answer

If the stock is trading for $42 at expiration and the owner of the call option has a strike price of $35, then the option is in-the-money by $7 per share. Therefore, the option is worth at least $7 per share.

If the Owner of a Call Option with a Strike