Which of the following statements is true?
A)For an in-the-money call option the price of the underlying security is below the option's exercise price.
B)For an in-the-money call option the price of the underlying security is equal to the option's exercise price.
C)For an in-the-money call option the price of the underlying security exceeds the option's exercise price.
D)The answer to the question depends on the type of the call option.

Question

Quizplus · Accepted Answer

For an in-the-money call option, the price of the underlying security exceeds the option's exercise price. This means that the option holder could exercise the option and buy the underlying security at a price lower than the market price, resulting in a profit for the holder.

Which of the Following Statements Is True