A Call Option with Several Months Until Expiration Has a Strike

question 12

Multiple Choice

A call option with several months until expiration has a strike price of $55 when the stock price is $50. The option has ________ intrinsic value and ________ time value.

• A) negative; positive
• B) positive; negative
• C) zero; zero
• D) zero; positive

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Definitions:

Persuasive Approach

A method or strategy designed to convince or influence someone to adopt a certain viewpoint or to take a specific action.

Formal Complaint

A written grievance lodged officially by an individual or group regarding a particular matter or misconduct.

Settlement

An agreement or resolution between parties in a dispute, often involving the payment of compensation.

Emotional Reaction

The affective response of an individual to a particular stimulus or situation, which can influence behavior and decision-making.