The fair market value of a near-month call option with a strike price of $45 is $5,when the stock is trading at $48.
-Based on the preceding information,the call option:
A)has no intrinsic value currently.
B)is at the money.
C)is out of the money.
D)is in the money.

Question

Quizplus · Accepted Answer

The call option is in the money because the stock's current price ($48) is higher than the strike price ($45), meaning if exercised, the option would have intrinsic value.

The Fair Market Value of a Near-Month Call Option with a Strike