SIE practice questioneasyIn/At/Out of the money
A 40 strike call option on stock trading at $38 is considered:
- AAt the money
- BIn the money
- COut of the money✓ Correct answer
- DIntrinsic value
Explanation
Why C — Out of the money
Calls are 'out of the money' when the stock price is below the strike price. At the money would require both equal, B (in the money) would require stock above strike, and D is not a status category.
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