A put option on Swiss franc has a strike (exercise) price of $.92. The present exchange rate is $.89. This put option can be referred to as:
A) in the money.
B) out of the money.
C) at the money.
D) at a discount.

Question

Quizplus · Accepted Answer

A put option is "in the money" when the strike price is above the current market price of the underlying asset. Here, the strike price ($.92) is higher than the current exchange rate ($.89), making the put option in the money.

A Put Option on Swiss Franc Has a Strike (Exercise)