An In-The-Money Put Option Is One That

question 7

Multiple Choice

An in-the-money put option is one that:

• A)has an exercise price greater than the underlying stock price.
• B)has an exercise price less than the underlying stock price.
• C)has an exercise price equal to the underlying stock price.
• D)should not be exercised at expiration.
• E)should not be exercised at any time.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing a claim on part of the company's assets and earnings.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with dividend payment preferences.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares of stock rather than cash.

Corporation's Directors

Individuals elected by a corporation's shareholders to oversee the management and make major business decisions on behalf of the shareholders.