Chapter 02 · Section 2.1
Chrysler call
A July 50 Chrysler call was bought for a premium of $2.00. If the call is exercised when Chrysler stock is trading at $55.00, at what price may the holder purchase the underlying stock?
a) $2.00
b) $55.00
c) $50.00
d) $48.00
The exercise price remains fixed over the life of an option.