Which One of the Following Combinations Creates an In-The-Money Option

question 94

Multiple Choice

Which one of the following combinations creates an in-the-money option?

• A)underlying stock price is less than the strike price of a call
• B)underlying stock price is $18 and the put has an exercise price of $15
• C)underlying stock price is $22 and the call has an exercise price of $25
• D)put strike price exceeds the underlying stock price
• E)put price is equal to the call price

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Definitions:

Target

In a business context, a target can refer to a specific goal or benchmark aimed to be achieved, such as sales targets or performance targets.

Individual Identity

The distinctive characteristics or personality that makes a person unique from others.

Typical Consolidation

The process of combining multiple financial statements from different entities into one aggregate financial statement.

Net Present Value

A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate, to determine its profitability.