
Answer-first summary for fast verification
Answer: -$5
The correct answer is **A (-$5)**. **Explanation:** The value of the call option to the call seller at expiration is determined by the payoff formula for the seller, which is: \[ \text{Payoff} = -\max(0, S_T - X) \] Where: - \( S_T \) is the price of the underlying at expiration ($30). - \( X \) is the strike price ($25). Substituting the values: \[ \text{Payoff} = -\max(0, 30 - 25) = -\max(0, 5) = -5 \] Thus, the call seller's payoff is -$5, which matches option A. Options B and C are incorrect because they either ignore the payoff formula or incorrectly incorporate the option premium into the calculation of the call seller's value at expiration.
Author: LeetQuiz Editorial Team
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An investor gathers the following information about a call option:
$5$25$15
At expiration, if the price of the underlying is $30, the value of the call option to the call seller is:A
-$5
B
$0
C
$10
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