At expiry,a call option is worth:

Question

Quizplus · Accepted Answer

At expiry, a call option is only valuable if the share price is higher than the exercise price. Therefore, the option's worth is the maximum of the share price minus the exercise price and zero. So option D is the correct choice. Option A is incorrect because the option could have no value if the share price is less than the exercise price. Option B is incorrect because the option could have a value less than the exercise price if the share price is only slightly above the exercise price. Option C is incorrect because the option could have no value if the share price is less than the exercise price.

At Expiry,a Call Option Is Worth