When the Exercise Price of an Option Is Equal to the Current

question 106

Multiple Choice

When the exercise price of an option is equal to the current price of the stock,the option is said to be:

• A)at-the-money.
• B)in-the-money.
• C)out-of-the-money.
• D)trading at par.
• E)trading below par.

---

Definitions:

Formal Written Contract

A contract that is officially documented in written form and typically requires a certain level of formality and requirements to be legally binding.

Area of Specialty

A specific domain or field in which an individual or organization possesses extensive knowledge or expertise.

Agency Coupled

A relationship where an agent is given an interest in the property of the principal, making the agency irrevocable for a specified period.

Principal's Benefit

The advantages or profits derived by an individual who has authorized another (an agent) to act on their behalf.