Final answer:
The maximum value of a call option is capped at the difference between the market price of the underlying asset and the option's strike price, as an option wouldn't be exercised for more than the asset's market value.
Step-by-step explanation:
The maximum value of a call option can never exceed the current market price of the underlying asset minus the strike price of the option. In simple terms, a call option gives the holder the right, but not the obligation, to buy an asset at a specified strike price on or before a certain date. The intrinsic value of a call option is found by subtracting the strike price from the market price of the underlying asset when the market price is higher than the strike price.
If the market price is less than the strike price, the call option has no intrinsic value and is considered out of the money. Therefore, it would make no sense for the maximum value of a call option to exceed the market price of the asset, as a rational investor would not exercise an option to buy an asset for more than its market value. This concept is particularly important for those studying finance and options trading.