Q679
Value of option which is considered as its worth as soon as it is expired is classified as
A.
minimum option value
B.
minimum value
C.
maximum value
D.
exercise value
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Value of option which is considered as its worth as soon as it is expired is classified as exercise value. The profit that an option holder would receive by exercising an in-the-money option. That is, the exercise value of an option is how much the strike price is below the underlying asset (for a call) or above the underlying asset (for a put).