A Call Option Whose Exercise Price Is Less Than the Spot

question 65

Multiple Choice

A call option whose exercise price is less than the spot price is said to be:

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

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Definitions:

Variable-Ratio Schedule

A reinforcement schedule in which a response is rewarded after an unpredictable number of responses, leading to high and steady rates of response.

Postreinforcement Pause

A cessation of behavior following reinforcement on a ratio schedule, which is followed by resumption of responding at the intensity characteristic of that ratio schedule.

Behavioral Contrast

The phenomenon where the rate of response to one stimulus changes as a consequence of a change in reinforcement conditions for another stimulus.

Variable-Interval Schedule

A Variable-Interval Schedule is a type of reinforcement schedule where responses are reinforced after varying intervals of time, making the reinforcement unpredictable.