​A Put Option on British Pounds Has a Strike (Exercise)

question 42

Multiple Choice

​A put option on British pounds has a strike (exercise) price of $1.48. The present exchange rate is $1.55. This put option can be referred to as:

• A) ​in the money.
• B) ​out of the money.
• C) ​at the money.
• D) ​at a discount.

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Definitions:

IFRS

International Financial Reporting Standards are worldwide guidelines for accounting, utilized in the creation of financial statements.

Depreciation

Apportioning the cost of a tangible asset in a systematic way over its period of usefulness.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for accruals, deferrals, and errors, ensuring the total debits equal the total credits.

Accounting Period

The period of time covered by financial statements, usually consisting of 12 months, but can be of any length according to the business's reporting requirements.