A stock currently sells for $15 per share.A put option on the stock with an exercise price $20 currently sells for $6.50.The put 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

A put option is in-the-money when the exercise price is above the current stock price. Here, the exercise price ($20) is higher than the stock price ($15), making the put option in-the-money.

A Stock Currently Sells for $15 Per Share