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Which of the following statements about the value of a call option at expiration is FALSE? A: The short position in the same call option can result in a loss if the stock price exceeds the exercise price. B: The value of the long position equals zero or the stock price minus the exercise price, whichever is higher. C: The value of the long position equals zero or the exercise price minus the stock price, whichever is higher. D: The short position in the same call option has a zero value for all stock prices equal to or less than the exercise price.

Which of the following statements about the value of a call option at expiration is FALSE? A: The short position in the same call option can result in a loss if the stock price exceeds the exercise price. B: The value of the long position equals zero or the stock price minus the exercise price, whichever is higher. C: The value of the long position equals zero or the exercise price minus the stock price, whichever is higher. D: The short position in the same call option has a zero value for all stock prices equal to or less than the exercise price.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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7. Which of the following statements about the value of a call option at expiration is FALSE? A: The short position in the same call option can result in a loss if the stock price exceeds the exercise price. B: The value of the long position equals zero or the stock price minus the exercise price, whichever is higher. C: The value of the long position equals zero or the exercise price minus the stock price, whichever is higher. D: The short position in the same call option has a zero value for all stock prices equal to or less than the exercise price.
Transcribed Image Text:7. Which of the following statements about the value of a call option at expiration is FALSE? A: The short position in the same call option can result in a loss if the stock price exceeds the exercise price. B: The value of the long position equals zero or the stock price minus the exercise price, whichever is higher. C: The value of the long position equals zero or the exercise price minus the stock price, whichever is higher. D: The short position in the same call option has a zero value for all stock prices equal to or less than the exercise price.
6. The following diagram shows the value of a put option at expiration: Long Put Exercise price of both Options Option Value Short Put 76 80 Stock Price ($) Ignoring transaction costs, which of the following statements about the value of the put option at expiration is TRUE? A: The value of the short position in the put is $4 if the stock price is $76. B: The value of the long position in the put is –$4 if the stock price is $76. C: The long put has value when the stock price is below the $80 exercise price. D: The value of the short position in the put is zero for stock prices equalling or exceeding $76.
Transcribed Image Text:6. The following diagram shows the value of a put option at expiration: Long Put Exercise price of both Options Option Value Short Put 76 80 Stock Price ($) Ignoring transaction costs, which of the following statements about the value of the put option at expiration is TRUE? A: The value of the short position in the put is $4 if the stock price is $76. B: The value of the long position in the put is –$4 if the stock price is $76. C: The long put has value when the stock price is below the $80 exercise price. D: The value of the short position in the put is zero for stock prices equalling or exceeding $76.
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