When a Currency Call Option Is Classified as "In the Money

question 119

Multiple Choice

When a currency call option is classified as "in the money," this indicates that

• A)the spot rate of the currency is less than the exercise price of the option.
• B)the spot rate of the currency is greater than the exercise price of the option.
• C)the buyer of the option would generate a profit; that is, the spot rate would exceed the sum of the exercise price and the premium paid.
• D)the buyer of the option would generate a profit; that is, the exercise price would exceed the sum of the spot rate and the premium paid

---

Definitions:

Validity

The degree to which a tool, test, or measure accurately represents or measures what it claims to.

Variability

The extent to which data points in a set differ from each other and from the average, indicating the spread or dispersion.

Reactivity

The tendency of participants to change their behavior due to the awareness of being observed or studied.

Internal Consistency Reliability

Reliability assessed with data collected at one point in time with multiple measures of a psychological construct. A measure is reliable when the multiple measures provide similar results.