ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    When the spot price of a Call Option is less than the

    strike Price of an Option, the Option is said to be _______
    A In-the Money Option Correct Answer Incorrect Answer
    B At-The money Option Correct Answer Incorrect Answer
    C Out of the money Option Correct Answer Incorrect Answer
    D European Option Correct Answer Incorrect Answer
    E American Option Correct Answer Incorrect Answer

    Solution

    ┬а In the case of a call option when the spot price (market price at present) is less than the strike (exercise price) then the option is said to be out of the money and will not be exercised by the option holder. As the holder can get the underlying asset at a lower price from the market rather than through the call option.

    Practice Next
    More Financial Management Questions

    Relevant for Exams:

    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call