Figure 1 depicts the:
A)position diagram for the buyer of a call option.
B)profit diagram for the buyer of a call option.
C)position diagram for the buyer of a put option.
D)profit diagram for the buyer of a put option.

Question

Figure 1 depicts the: 
A)position diagram for the buyer of a call option. 
B)profit diagram for the buyer of a call option. 
C)position diagram for the buyer of a put option. 
D)profit diagram for the buyer of a put option.

Quizplus · Accepted Answer

Figure 1 is a profit diagram for the buyer of a call option. It shows the potential profit or loss at expiration for different stock prices. The X-axis represents the stock price and the Y-axis represents the profit or loss. The diagram shows that the buyer of a call option has unlimited potential profit if the stock price goes up, while the maximum loss is limited to the premium paid for the option.

Figure 1 Depicts The