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You purchased a call option for an Apple stock with the strike price of $110. The...

  1. You purchased a call option for an Apple stock with the strike price of $110. The option premium was $1. You held the option until maturity, when the price for each share of Apple was $111. Your payoff at maturity was_____.

    -$2.

    $-1

    $1

    $0

Solutions

Expert Solution

Payoff at maturity = Max(Market price at maturity - Strike Price,0) - (Option premium paid)

= $111-110-1

= $ 0

Note: since it's a call option therefore the call buyer will get the profit when the market price will be higher than exercise price.

jeff jeffy answered 2 years ago
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