A European call option for a share costs $5.00. The exercise price of the call option is $100.00. An investor buys one call and holds it until maturity: a. Under what circumstances will the holder of the option make a profit? b. Under what circumstances will the option be exercised? c. Draw a profit/loss diagram to illustrate the position of the call option holder.

Answer rating: 100% (QA)

A The holder of the call will make a profit if the market price of the share at the time of maturity ... View the full answer