If a Call Has a Positive Intrinsic Value at Expiration

question 417

Multiple Choice

If a call has a positive intrinsic value at expiration the call is said to be:

• A) Funded.
• B) Unfunded.
• C) At the money.
• D) In the money.
• E) Out of the money.

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Definitions:

Participating Right

A feature of certain securities that allows the holder to receive dividends or other benefits in addition to the basic rights associated with the security.

Outstanding Stock

Shares of a corporation that have been issued and are currently held by investors, including public shareholders and company insiders.

Authorized Stock

The maximum number of shares a corporation is legally permitted to issue, as specified in its corporate charter.

Noncumulative Nonparticipating

Noncumulative nonparticipating refers to a type of preferred stock where dividends do not accumulate if not declared and the stockholders do not participate in additional corporate earnings beyond the specified dividend rate.