When the exercise price of a call option is higher than the current price of the stock,the option is said to be:
A)at-the-money.
B)in-the-money.
C)out-of-the-money.
D)trading at par.
E)trading below par.

Question

Quizplus · Accepted Answer

When the exercise price of a call option is higher than the current price of the stock, the option is considered out-of-the-money because the option holder would not choose to exercise the option for a loss. In order for the option to become profitable, the stock price would need to rise above the exercise price.

When the Exercise Price of a Call Option Is Higher