SIE practice questionmediumMax gain/loss
The maximum loss for an investor who buys a call option is:
- AUnlimited
- BThe premium paid✓ Correct answer
- CThe strike price
- DThe difference between strike and market price
Explanation
Why B — The premium paid
A call buyer can only lose the premium if the option expires worthless. Unlimited loss is for uncovered call writers, and the other options are not applicable to long calls.
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