A Call Option Described as Out of the Money Would

question 64

Multiple Choice

A call option described as out of the money would find:

• A)The market price of the stock is above the strike price.
• B)The option has been exercised.
• C)The option has expired.
• D)The strike price is above the market price of the stock.

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Definitions:

Legal Reserves

Legal reserves are funds that financial institutions are required to hold in reserve against deposits made by their customers, as dictated by regulatory authorities.

Vault Cash

Physical money that is held in banks' vaults and ATMs, used to meet the bank's obligations to depositors.

Federal Reserve Bank

One of the 12 regional banks that, together with the Board of Governors, make up the Federal Reserve System, which serves as the central banking system of the United States.

Treasury Notes

Short- to medium-term debt obligations issued by a national government with fixed interest rates and maturities ranging from one to ten years.