A call option is out of the money when the ____. A. market price of the...
A call option is out of the money when the ____.
- A. market price of the underlying security exceeds the exercise price
- B. market price of the underlying security equals the exercise price
- C. market price of the underlying security is less than the exercise price
- D. premium on the option is less than the exercise price
- E. premium on the option is less than the market price of the underlying security
Homework Answers
A call option is said to be out of the money if the current price of the underlying stock is below the strike price of the option
i.e Market price of the underlying security < Exercise Price.
Option 'C' is correct
Add Answer to:
A call option is out of the money when the ____.
A. market price of the...
The current market price of a share of Disney stock is $30. If a call option...
The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably. The maximum loss for a writer of a put option on a stock is unlimited. equal to the exercise price. equal...
When the exercise price of a call option is higher than the current price of the...
When the exercise price of a call option is higher than the current price of the stock, the option is said to be: a. at-the-money. b. in-the-money. c. out-of-the-money. d. trading at par.
When the exercise price of a call option is higher than the current price of the...
When the exercise price of a call option is higher than the current price of the stock, the option is said to be: At-the-money. In-the-money. Out-of-the-money. Trading at par.
Call option A has an exercise price of $20. Call option B has an exercise price...
Call option A has an exercise price of $20. Call option B has an exercise price of $15. If all other characteristics of these options are identical and they are on the same underlying asset, which option will have a higher price? A. Call option A will have a higher price. B. Call option B will have a higher price. C. Call option A and call option B will have the same price. D. It’s impossible for two options on...
EXplain 21, and 22.*(DOUBLE-WEİGHD Suppose a call option on a given stock has premium $4 per share, and the put option at the same exercise price (E-$100) has premium $3 per share. The price of a...
EXplain 21, and 22.*(DOUBLE-WEİGHD Suppose a call option on a given stock has premium $4 per share, and the put option at the same exercise price (E-$100) has premium $3 per share. The price of a Treasury security having the same maturity as the option is.9800 (dollars per face). a. What would you expect the price of the underlying security to be? b. Illustrate with a graph the profit or payoff profile that would result from a "covered call" (write...
If the spot price of the underlying asset is greater than the strike price, a call...
If the spot price of the underlying asset is greater than the strike price, a call option is ______ and a put option is ______. A. in the money; out of the money B. out of the money; in the money C. in the money; in the money D. out of the money; out of the money E. at the money; at the money
6. A call option has an exercise price of $45 and a premium of $4. If...
6. A call option has an exercise price of $45 and a premium of $4. If the price of the underlying stock is $60, the total payoff of the option is ____? 7. A put option has an exercise price of $20 and a premium of $2. If the price of the underlying stock is $11, what of the total payoff of the option? 8. You write a call option with an exercise price of $67 and a premium of...
25. You buy a call option on Boeing Corp with an exercise price of $40 and...
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer is A. The...
If a call option with a strike price of $65.00 is in the money then: Select...
If a call option with a strike price of $65.00 is in the money then: Select one: a. a put option with the same strike price is also in the money. b. the intrinsic value of the call is negative. c. the intrinsic value of a put option with the same strike price is negative. d. a put option with a strike price of $60.00 is out of the money.
With a covered call strategy, an advantage of selecting a low strike price for the call...
With a covered call strategy, an advantage of selecting a low strike price for the call option is: A. it’s more likely to expire out-the-money than a call with a higher strike price B. it costs less to buy than a call option with a higher strike price C. the cash inflow from the premium is higher than for a call option with a higher strike price D. the maximum profit is greater than for a call option with a...
EXplain 21, and 22.*(DOUBLE-WEİGHD Suppose a call option on a given stock has premium $4 per share, and the put option at the same exercise price (E-$100) has premium $3 per share. The price of a Treasury security having the same maturity as the option is.9800 (dollars per face). a. What would you expect the price of the underlying security to be? b. Illustrate with a graph the profit or payoff profile that would result from a "covered call" (write...
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer is A. The...
Most questions answered within 3 hours.
-
what ate the mechanisms that pseudomonas aeruginosa utilize to
cause disease on skin and in the...
asked 3 minutes ago -
What is the present value of the following? Use Appendix B as an
approximate answer, but...
asked 5 minutes ago -
A 0.500 kg ice puck, moving east with a speed of 5.10 m/s ,
has a...
asked 11 minutes ago -
Draw an EER diagram for the following problem and map it into
tables: the sponsors of...
asked 12 minutes ago -
[C++]
Write a program that reads a list of integers, and outputs those
integers in reverse....
asked 33 minutes ago -
Product quality, service, and price were the three factors
identified as being major determinates of a...
asked 39 minutes ago -
After performing an EDTA titration experiment on 256 mL of an
unknown water sample you find...
asked 54 minutes ago -
The price elasticity of demand for a product is -1.00. You know
that...
a. Sales Revenue...
asked 1 hour ago -
Discuss "Radical Reactions in Alkanes" giving one example. Your
explanation should include relevant mechanisms and reference...
asked 1 hour ago -
A 13-year bond with a face value of 1500 dollars is redeemable
at twice par, and...
asked 1 hour ago -
Topdog is a toy company, whose profits/sales percentage is 13%
in 2015, 16% in 2016 and...
asked 1 hour ago -
A sag curve and crest curve connect a –3.5% tangent section of
highway (to the west)...
asked 1 hour ago