Q623
According to exercise value and option price, market value of option will be zero when
A.
stock price is maximum
B.
option price is zero
C.
stock price is zero
AnswerD.
stock price is minimum
Answer: Option C
Solution
Answer: Option C
Solution:
According to exercise value and option price, market value of option will be zero when stock price is zero. The strike price is defined as the price at which the holder of an options can buy (in the case of a call option) or sell (in the case of a put option) the underlying security when the option is exercised. Hence, strike price is also known as exercise price.