A stock currently sells for $150 per share.A call option on the stock with an exercise price $155 currently sells for $2.50.The call option is
A) At-the-money.
B) In-the-money.
C) Out-of-the-money.
D) At breakeven.
E) None of the above.

Question

Quizplus · Accepted Answer

The exercise price of the call option is $155, which is higher than the current stock price of $150. This means that the call option is out-of-the-money because it would not be profitable to exercise the option at this time. The fact that the call option is priced at $2.50 does not change its status as out-of-the-money.

A Stock Currently Sells for $150 Per Share