You sold a call option on a stock ten days ago for $1.25. Its strike price is $20. Its current value is $1.60. The current stock price is $19. The amount of credit risk is

a. $1.60

b. $1.25

c. $19

d. $0

You sold a call option on a stock ten days ago for $1.25. Its strike price is $20. Its current value is $1.60. The current stock price is $19.

Who bears the credit risk?

a.Nobody does.

b.The buyer of the call does.

c.Equally by both of you

d.You do.