When a Call Is Out of the Money Then Its

question 130

Multiple Choice

When a call is out of the money then its intrinsic value is equal to:

• A) Zero.
• B) The exercise price.
• C) The stock price.
• D) The difference between the exercise price and the stock price.
• E) The upper bound of the call's value.

---

Definitions:

Adjusting Entry

Bookkeeping entries executed at the termination of an accounting cycle, intended to apportion income and outlays to their respective periods of occurrence.

Accrue Wages

The process of recognizing wages that have been earned by employees but have not yet been paid out by the company.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenue.

Total Assets

The sum of all current and non-current assets that a company owns, as shown on the balance sheet.