Your Aunt Agatha purchased a call option a few months ago
17. Your Aunt Agatha purchased a call option a few months ago. Today is the expiration date, so she must decide whether to exercise the option. Which of the following statements is correct? Do not consider brokers’ commissions in your answer.
a. Aunt Agatha doesn’t need to make a decision about exercising the option today; in fact, it would be better if she waited until after the option expires.
b. Aunt Agatha should exercise the option if the price of the stock is less than the exercise, or strike, price.
c. Aunt Agatha should exercise the option if the price of the stock is greater than the exercise, or strike, price.
d. Aunt Agatha should exercise the option, regardless of the current stock price.
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