Option payoffs: You have sold a call option on ABC Co. stock with a strike price of $40. You do not intend to make any other transactions before the options expiration date. The current stock price is $20. Which of the following statements best describes your hopes for the stock?
A) You want the stock price to fall.
B) You want the stock price to rise.
C) You are indifferent, as long as the stock price stays under $40.
D) It doesn't matter; you are indifferent to changes in the stock price.
Answer: C
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