An investor takes a call option on euro futures contracts at strike price of $0.65.If the market price of euro futures increases to $0.67,the call option will be called:

Question

Quizplus · Accepted Answer

The call option will be "in the money" because the strike price is $0.65 and the market price of euro futures has increased to $0.67, which means the investor has the right to buy the futures contracts at $0.65 and sell them at the higher market price of $0.67, thereby earning a profit.

An Investor Takes a Call Option on Euro Futures Contracts