A Stock Currently Sells for $75 Per Share

question 51

Multiple Choice

A stock currently sells for $75 per share.A call option on the stock with an exercise price $70 currently sells for $5.50.The call option is

• A) At-the-money.
• B) In-the-money.
• C) Out-of-the-money.
• D) At breakeven.
• E) None of the above.

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Definitions:

Opportunity Cost

The evasion of possible rewards from diverse options by committing to one alternative.

Oranges

Citrus fruits known for their juicy and sweet flavor, often consumed directly or used in various culinary dishes and drinks.

Peaches

A type of fruit known for its sweet flavor and fuzzy skin that grows on trees in temperate regions.

Opportunity Cost

The price of foregoing the next most desirable option when a decision is made.