The payoff for an investor who is long a call option with a strike price of $60 and the underlying asset price is $45 is closest to:
A) -$15
B) $0
C) $15
D) $45
E) $60

Question

Quizplus · Accepted Answer

When an investor is long a call option and the market price of the underlying asset is below the strike price ($45 < $60), the option is out-of-the-money and will not be exercised. The investor's payoff is $0 because the option has no intrinsic value.

The Payoff for an Investor Who Is Long a Call