When the exercise price of a call option is lower than the current price of the stock, the option is said to be ________.
A) at-the-money
B) in-the-money
C) out-of-the-money
D) none of the above

Question

Quizplus · Accepted Answer

When the exercise price of a call option is lower than the current price of the stock, the option is said to be in-the-money. This means that the holder of the call option can purchase the stock at a lower price than its current market value, which provides a profit opportunity.

When the Exercise Price of a Call Option Is Lower