A Put Option in Which the Stock Price Is $60

question 34

Multiple Choice

A put option in which the stock price is $60 and the exercise price is $65 is said to be

• A)in-the-money
• B)out-of-the-money
• C)at-the-money
• D)exercisable
• E)none of the above

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Definitions:

Interest Rate

Interest rate is the percentage of the principal amount charged by lenders for the use of their money or paid by banks for keeping money in an account.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, specifically the ratio of its total liabilities to its total assets.

Business Risk

The exposure to uncertainty and potential loss in a company’s operations due to factors like fluctuations in revenue or expenses.

Financial Risk

The possibility of losing money on an investment or business venture, often due to changes in the financial markets or failure to meet debt obligations.