An Option Whose Exercise Price Is Equal to the Spot

question 23

Multiple Choice

An option whose exercise price is equal to the spot rate is said to be:

• A) in-the-money.
• B) at-the-money.
• C) out-of-the-money.
• D) on-the-spot.

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Definitions:

Demand

The amount of a product or service buyers are prepared and can afford to buy at different price levels within a given timeframe.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Quantity Demanded

Quantity Demanded is the total amount of a good or service that consumers are willing and able to purchase at a given price, over a specified time period.

Total Revenue

The complete amount of income generated by the sale of goods and services before any expenses are deducted.