The ____ is the price that the call option buyer pays the writer of the option if the buyer decides to exercise the option.
A) option premium
B) option discount
C) conversion price
D) exercise price

Question

Quizplus · Accepted Answer

The exercise price is also commonly known as the strike price, and it is the price at which the call option buyer can purchase the underlying asset. When the call option buyer decides to exercise their option, they must pay this exercise price to the option writer. This is different from the option premium, which is the price the buyer pays upfront to purchase the option.

The ____ Is the Price That the Call Option Buyer