Based on the Relationship Between the Strike Price and the Current

question 59

Multiple Choice

Based on the relationship between the strike price and the current price, an option may be at-the-money, out-of-the-money or in-the-money.Which of the following statements is true?

• A)​A Call Option is out-of-the-money when the strike price is greater than the current price.
• B)​A Put Option is in-the-money when the strike price is greater than the current price.
• C)​A Put Option is out-of-the-money when the strike price is less than the current price.
• D)​All of the above are true.

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Definitions:

Complements

Goods or services that are often used together, where the consumption of one enhances the consumption of the other.

Negative

In finance, can refer to negative interest rates or investments; in psychology, relates to negative emotions or attitudes.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a change in the price of another good.

Garlic Salt

A seasoning made from a blend of dried, ground garlic and table salt, often with an anti-caking agent to prevent clumping.