If a Microsoft January 20 call option had a strike price of $20 and the market price of the underlying Microsoft stock was $25.62, the call option would be _______________.
A) in-the-money
B) out-of-the-money
C) fairly priced
D) called by the Microsoft

Question

Quizplus · Accepted Answer

The call option allows the holder the right to buy Microsoft stock at the strike price of $20. Since the current market price of the stock is $25.62, the call option would allow the holder to purchase the stock at a discounted price, making it in-the-money.

If a Microsoft January 20 Call Option Had a Strike