How many of the January 2009 call options are in-the-money?
A)2
B)4
C)1
D)3
E)0

Question

Quizplus · Accepted Answer

To determine if a call option is in-the-money, we compare the strike price of the option to the current stock price. If the stock price is higher than the strike price, the option is in-the-money. Looking at the table, we see that the stock price on January 4, 2009, was $77.24. The strike prices for the call options are $50, $60, $70, and $80. Only the options with strike prices of $50, $60, and $70 are in-the-money because their strike prices are lower than the stock price. Therefore, there are 3 in-the-money call options.

How Many of the January 2009 Call Options Are In-The-Money