When the Exercise Price of a Call Option Is Higher

question 15

Multiple Choice

When the exercise price of a call option is higher than the current share price, the option is said to be

• A)at-the-money.
• B)in-the-money.
• C)out-of-the-money.
• D)None of the above.

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Definitions:

Long-Term Bonds

Debt securities with maturities typically longer than 10 years, offering regular interest payments and repayment of principal at maturity.

Life Insurance Firms

Companies that provide financial compensation to beneficiaries upon the death of the insured person.

Death Benefit

The sum paid to a policyholder's beneficiaries upon their death, typically in life insurance and annuities.

Variable Life

A type of life insurance policy where the cash value and death benefit vary based on the investment performance of funds chosen by the policyholder.