A stock is selling for $33.13. A call option on the stock has a strike price of $40. This option is

Question

Quizplus · Accepted Answer

The strike price of the call option is higher than the current stock price, so the call option is out-of-the-money. The strike price of the call option is $40, which is higher than the current stock price of $33.13. This means that the call option is out-of-the-money, as the option holder would not want to exercise the option and buy the stock for $40 when they could buy it for less in the current market.

A Stock Is Selling for $33