Gordon Is Considering Purchasing Either a Call or a Put

question 57

Multiple Choice

Gordon is considering purchasing either a call or a put option on XYZ stock. Each of the options has an exercise price of $40 and XYZ is trading at $44.50 per share. Which of the following statements about the options is correct?

• A) The put option is in the money, whereas the call option is out of the money.
• B) The call option is in the money, whereas the put option is out of the money.
• C) Both the put and the call option are in the money.
• D) Both the put and the call option are out of the money.

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Definitions:

Vision

The faculty or state of being able to see; also, a concept or plan regarding the future.

Middle Adulthood

A stage of life, typically considered to be from ages 40 to 65, marked by stability, maturity, and established social and economic roles.

Reproductive Ability

The capacity of an individual or organism to produce offspring.

Men

Adult human males, often referred to in contexts involving gender differences, social roles, or physiological characteristics.