The Current Market Price of a Share of CSCO Stock

question 103

Multiple Choice

The current market price of a share of CSCO stock is $22.If a call option on this stock has a strike price of $20,the call

• A)is out of the money.
• B)is in the money.
• C)sells for a higher price than if the market price of CSCO stock is $21.
• D)A and C.
• E)B and C.

---

Definitions:

Unrealized Gains

Profits that have been achieved on paper from investments but have not yet been sold for cash, and therefore are not reflected in the income statement.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.

Fair Value Adjustment

An accounting process to adjust the book value of assets or liabilities to their current market value, often for financial reporting purposes.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, presenting the assets, liabilities, and equity of the entire group as if it were a single entity.