Which of the following statements is true?

Question

Quizplus · Accepted Answer

In-the-money refers to the situation where the option has intrinsic value, which means the option is worth exercising. For a put option, this occurs when the stock is selling below the exercise price, allowing the option holder to sell the stock at a higher price. Option A is incorrect as it describes the opposite scenario for a call option. Option C is incorrect as it defines an out-of-the-money put option. Option D is incorrect as it defines an out-of-the-money call option.

Which of the Following Statements Is True