SIE practice questionhardIn/Out/At the money
A call with a $25 strike and the underlying stock at $22 is:
- AOut of the money by $3✓ Correct answer
- BAt the money
- CIn the money by $3
- DIn the money by $22
Explanation
Why A — Out of the money by $3
Calls are out-of-the-money if the strike exceeds market price, here by $3. In-the-money would require higher market price.
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