Answer: $697.60.

## Explanation For a call option at expiration, the value is given by: **Call Value = Max(0, S - K)** Where: - S = Price of the underlying at expiration - K = Strike price Given: - Call premium paid = $24.70 (this is the cost to buy the option, not relevant for expiration value calculation) - Strike price (K) = $650 - Call value at expiration = $47.60 We need to solve for S: $47.60 = Max(0, S - $650) Since the call has positive value ($47.60 > 0), we know S > K: $47.60 = S - $650 S = $650 + $47.60 = $697.60 Therefore, the price of the underlying at expiration is $697.60. **Why not the other options:** - **A. $602.40**: This would result in a call value of Max(0, 602.40 - 650) = Max(0, -47.60) = $0, not $47.60 - **B. $672.90**: This would result in a call value of 672.90 - 650 = $22.90, not $47.60 **Key Concept**: The premium paid ($24.70) is a sunk cost and doesn't affect the intrinsic value calculation at expiration. Only the strike price and underlying price matter for determining the option's payoff.

Author: LeetQuiz .