In June 2007, an investor buys a put option on Genentech stock with an exercise of price
Of $75 and expiring in January 2009. If the stock price in June 2007 is $80, then this option is:
I. in-the-money
II. out-of-the-money
III. a LEAPS
A) I only
B) II only
C) III only
D) I and III only

Question

Quizplus · Accepted Answer

The option is in-the-money because the exercise price is less than the stock price. The option is also a LEAPS because it expires more than nine months from the date of purchase.

In June 2007, an Investor Buys a Put Option on Genentech