Question $4($Mandatory$)(3\mathrm{.}125$ points$)$

Which of the following is the long call option position's decision when $S_t>K?$

Exercise, as $S_t$ received by the long position is greater than $K$ paid by the long position

Don't exercise, as $S_t$ received by the long position is greater than $K$ paid by the long position

Exercise, as $S_t$ received by the short position is greater than $K$ paid by the long position

Don't exercise, as $S_t$ received by the short position is greater than K paid by the long position