If a Call Is in the Money on the Expiration

question 374

Multiple Choice

If a call is in the money on the expiration date then:

• A) The strike price must exceed the stock price.
• B) The value of the call is equal to the stock value plus the present value of the exercise price.
• C) The intrinsic value of the call is positive.
• D) The risk-free rate of return has declined since the call was written.
• E) The call must be a European rather than an American call.

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