Reading 28 - Option - Example 1

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sachin_patel

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call Option price $7, exercise price $100 and underlying price is $98
the question asks what is maximum profit to buyer?
I thought it was unlimited. but the answer came up with $8.
I can’t understand how its $8. Can someone explain?
Thanks
 
Not sure what you are looking at, I am looking at my 2014 book - and for example 1 of the reading - Max Profit is infinite.
Is there any erratum for this?
Are you reading the symbol ∞ (infinity) as 8 by any chance?
also - please note this is “optional” material in the 2014 book - not sure about now.
 
In my copy of the curriculum it says that the maximum profit to the buyer is infinite (∞).
 
Thank you guys!! really appreciated. i opened the web version in chrome and it didn’t handle the character it seems.. somehow changed it to 8
thanks for confirming..
 
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