A Stock Currently Sells for $150 Per Share

question 41

Multiple Choice

A stock currently sells for $150 per share.A call option on the stock with an exercise price $155 currently sells for $2.50.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:

Asset Sale

A type of business transaction where a company sells its assets, such as equipment, inventory, or real estate, rather than its stock.

Registration Statement

A set of documents, including financial statements and other significant details, filed with a regulatory body prior to issuing securities to the public.

SEC

The U.S. Securities and Exchange Commission, a federal government agency responsible for regulating the securities industry and protecting investors.

Securities

Financial instruments representing ownership (stocks), a debt agreement (bonds), or the rights to ownership (derivatives) that can be bought and sold.