A stock currently sells for $15 per share. A put option on the stock with an exercise price of $20 currently sells for $6.50. The put option is
A) at-the-money.
B) in-the-money.
C) out-of-the-money.
D) at breakeven.
E) above-the-money.

Question

Quizplus · Accepted Answer

A put option is considered "in-the-money" when the exercise price is above the current stock price. Here, the exercise price is $20, and the stock price is $15, making the put option in-the-money.

A Stock Currently Sells for $15 Per Share