Which of the following statements is the most accurate as it pertains to buying a call option on the XYZ Stock. The current stock price is $39.25. There is a call option on it with a premium of $5.50. It carries a strike price of $36.25. The value of the option is $3.00. There will be a Loss of $2.50 if it is exercised.

You will not exercise the option as there is a loss of $2.50.

You will exercise the option accepting the loss of $2.50 because the non-exercising of the option will incur a loss of $5.50.

You will not exercise the option as it is out-of-the-money.

You will exercise the option as it is in the money and will incur a gain of $2.50 upon exercising of the option.