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Suppose you buy a call option on Caterpillar stock with a strike price of $200. Which of the following is true? A. If the stock

Suppose you buy a call option on Caterpillar stock with a strike price of $200. Which of the following is true?

A.

If the stock price is higher than $200, prior to expiration, you must exercise your option unless you have sold it.

B.

If the stock price is higher than $200, prior to expiration, you can exercise your option and earn a profit.

C.

If the stock price is lower than $200, prior to expiration, you can exercise your option and earn a profit.

D.

Your profit will be the option premium.

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