When the Existing Spot Rate Exceeds the Exercise Price, a Call

question 111

Multiple Choice

When the existing spot rate exceeds the exercise price, a call option is ____, and a put option is ____.​

• A) ​out of the money; in the money
• B) ​out of the money; out of the money
• C) ​in the money; in the money
• D) ​in the money; out of the money

---

Definitions:

Direct Materials

Ingredients that are identifiable as directly contributing to the creation of a product.

Direct Labor

The cost of labor directly involved in the manufacture of products, such as wages paid to workers on the assembly line.

Manufacturing Overhead

All indirect costs associated with the production process, including utilities, depreciation, and salaries of non-direct labor.

Direct Labor

Direct labor refers to the wages paid to employees who are directly involved in the production of goods or services.