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:

Prosperity

A state of flourishing, wealth, or success, often reflecting economic growth, high living standards, and general wellbeing.

Prohibition

A period in United States history (1920-1933) during which the manufacture, sale, and transportation of alcoholic beverages were made illegal by the 18th Amendment to the Constitution.

Federal Prisons

Incarceration facilities operated by the Federal Bureau of Prisons, a division of the United States Department of Justice, designed to house individuals convicted of federal crimes.

American Civil Liberties

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