A call option whose exercise price exceeds the spot rate is said to be
A) in-the-money.
B) at-the-money.
C) out-of-the-money.
D) over-the-spot.

Question

Quizplus · Accepted Answer

An out-of-the-money call option means that the exercise price is higher than the current market price, indicating that if the holder were to exercise the option, they would be paying more than the market value, resulting in a loss.

A Call Option Whose Exercise Price Exceeds the Spot Rate