You own a call option with time to expiration. The common stock is selling for $15 and your exercise price is $12, this option:
A) must be sold to the writer.
B) is in-the-money.
C) is out-of-the-money.
D) must be offset by a put.

Question

Quizplus · Accepted Answer

An option is considered "in-the-money" when the exercise price is below the current market price for a call option. Since the exercise price is $12 and the stock is selling for $15, the call option is in-the-money, meaning it has intrinsic value.

You Own a Call Option with Time to Expiration