Credit Risk - Option (CFAI Rd37 Q17 B)

this option is out of money at the moment, why would it have any credit risk to the option buyer? $6 market value is the premium, which is already paid to the option seller. the answer doesn’t make sense to me…

you miss the word POTENTIAL

got it, thanks fred… the premium is actually the PV of the potential option value, which is the current potential credit risk the long (call option) side is bearing… am i right?

I think so