Question

The terms "In", "at" or "out" of the money are directly connected to A-Option Premium B- Option Intrinsic Value C-Option...

The terms "In", "at" or "out" of the money are directly connected to
A-Option Premium
B- Option Intrinsic Value
C-Option Time Value
D Option Strike Price
E-Option Expiration

0 0
Add a comment Improve this question Transcribed image text
Answer #1

The answer is

B. Option intrinsic value

Intrinsic value = market price - strike price

When intrinsic value is 0, option is at the money

If greater than 0, it is in the money

When less than 0, out of money

Add a comment
Know the answer?
Add Answer to:
The terms "In", "at" or "out" of the money are directly connected to A-Option Premium B- Option Intrinsic Value C-Option...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 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.

  • At expiration, an option 1. is worth its intrinsic value 2. has no time premium 3....

    At expiration, an option 1. is worth its intrinsic value 2. has no time premium 3. may be exercised by the buyer but not by the writer a. 1 and 2 b. 1 and 3 c. 2 and 3 d. 1, 2, and 3

  • The intrinsic value of an option A. is the amount the option is expected to be...

    The intrinsic value of an option A. is the amount the option is expected to be worth on its expiration date. B. is the amount the option actually is worth if it is immediately exercised. C. is equal to the option premium. D. is impossible to determine in the absence of information on the future prices of the underlying asset.

  • 2. An American put option can be exercised: a. b. c. d. e. At any time...

    2. An American put option can be exercised: a. b. c. d. e. At any time on or before the expiration date. Only on the expiration date. Any time in the indefinite future. Only after the dividend has been paid. None of the above. 3. A European call option can be exercised: a. Any time in the future. b. Only on the expiration date. c. If the price of the underlying asset declines below the exercise price. d. Immediately after...

  • I am currently confused about these questions. please help me to figure out these questions. thanks...

    I am currently confused about these questions. please help me to figure out these questions. thanks The price of Stock ABC is currently S50. A call option on 100 shares of Stock ABC has an exercise price of S49 and the call premium is S3. Is the option currently "in" or "out" of the money? What is the intrinsic value and the time value of the option today? What is the break-even future stock price associated with the option? What...

  • You have taken a long position in a call option on IBM common stock. The option...

    You have taken a long position in a call option on IBM common stock. The option has an exercise price of $148 and IBM's stock currently trades at $153. The option premium is $7 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit on the option if IBM’s stock price increases to $163 at expiration of the option and you exercise the option? c. What is...

  • Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call...

    Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 35 1.25 1 36 35 1.45 Intrinsic Value Intrinsic Value Time Value Time Value Cost Cost Close Close Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 40 4.25 1 36 40 0.05 Intrinsic Value Intrinsic Value...

  • 5. A call option on Company B common stock is worth $8 with 7 months before...

    5. A call option on Company B common stock is worth $8 with 7 months before expiration. The strike price on the call is $40 and the price per share is currently trading at $44 per share. The put option at the same exercise price is worth $1.50. a. Is the call option in or out or the money? b. Is the put option in or out of the money? c. At what extra above expiration value is the call...

  • 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...

  • The premium on a June 17 British pound call option with a strike price of $1.2560...

    The premium on a June 17 British pound call option with a strike price of $1.2560 when the spot rate is $1.2620 is quoted as $0.02. The time value of this option is. The premium on a June 17 British pound call option with a strike price of $1.2750 when the spot rate is $1.2620 is quoted as $0.025. The intrinsic value of this option is. Your firm has an accounts receivable worth C$200,000 due in six months. The firm...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT