Suppose the Current Spot Rate for the Pound Is $01

question 18

Multiple Choice

Suppose the current spot rate for the pound is $01.7427.A put option with an exercise price of $01.7550 is said to be

• A)in-the-money
• B)out-of-the-money
• C)at-the-money
• D)past breakeven

---

Definitions:

Premium

An amount paid for an insurance policy or in broader terms, can represent a fee or price paid for higher quality or superior service.

Universal Life Insurance

A form of straight life insurance that allows the policy owner flexibility in choosing and changing terms of the policy.

Policy Owner

The individual or entity that holds and controls an insurance policy and has the right to exercise all privileges under the contract.

Face Value

The nominal or stated value of a financial instrument or document, such as a bond or stamp, not necessarily its market value.