The current market price of a share of AT&T stock is $50. If a put option on this stock has a strike price of $45, the put
A) is out of the money.
B) is in the money.
C) sells for a lower price than if the market price of AT&T stock is $40.
D) is out of the money and sells for a lower price than if the market price of AT&T stock is $40.
E) is in the money and sells for a lower price than if the market price of AT&T stock is $40.

Question

Quizplus · Accepted Answer

If the striking price on a put option is less than the market price, the option is out of the money and sells for less than an in the money option.

The Current Market Price of a Share of AT&T Stock