An option that would not yield a positive payoff if exercised today is referred to by which one of the following terms?
A) hollow option
B) zero option
C) in-the-cellar option
D) out-of-the-money option
E) strike-out

Question

Quizplus · Accepted Answer

An option that would not yield a positive payoff if exercised today is referred to as an "out-of-the-money" option. This is because the strike price of the option is higher (for call options) or lower (for put options) than the current market price of the underlying asset.

An Option That Would Not Yield a Positive Payoff If