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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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