The correct answer is B. expiry date.
A call option is a contract that gives the buyer the right, but not the obligation, to buy a specified amount of an underlying asset at a specified price on or before a specified date. The seller of the call option is obligated to sell the asset at the specified price if the buyer exercises the option.
The Black-Scholes model is a mathematical model that is used to price options. The model assumes that the underlying asset price follows a geometric Brownian motion. This means that the asset price changes randomly, but the changes are normally distributed.
The Black-Scholes model shows that the price of a call option is determined by the following factors:
- The strike price of the option
- The expiration date of the option
- The volatility of the underlying asset price
- The risk-free interest rate
- The price of the underlying asset
The Black-Scholes model also shows that a call option is always worth more than its intrinsic value. The intrinsic value of a call option is the difference between the strike price and the price of the underlying asset.
A call option is well exercised on its expiry date if the strike price is below the price of the underlying asset. This is because the buyer of the call option can then buy the underlying asset at the strike price, which is below the market price.
The other options are incorrect because they are not the expiry date of the option.