CFA Practice Question

CFA Practice Question

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.
Explanation: On its expiration date, the value of a LONG call option is equal to its intrinsic value

User Contributed Comments 2

User Comment
msoentoro Why not b??
moneyguy zero if stock price is lower than exercise price.

or (for example)

stock price = 100
exercise price = 90
long position value = 10
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