A Call Option on Australian Dollars Has a Strike (Exercise)

question 15

Multiple Choice

A call option on Australian dollars has a strike (exercise) price of £0.40. The present exchange rate is £0.43. This call 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:

Market Structure

The organization and characteristics of a market, including the number and size of sellers, product differentiation, and ease of entry and exit.

Monopolistic Competition

A market structure in which many firms sell products that are similar but not identical.

Market Structure

The organizational characteristics of a market, influencing competition and pricing, including perfect competition, monopolistic competition, oligopoly, and monopoly.

Oligopoly

A market structure characterized by a small number of firms dominating the market, often leading to limited competition.