Suppose the current spot rate for the euro is $1.3427.A call option with an exercise price of $1.3550 is said to be
A)in-the-money
B)out-of-the-money
C)at-the-money
D)past breakeven

Question

Quizplus · Accepted Answer

An option is considered in-the-money if the spot rate is higher than the exercise price, at-the-money if they are equal, and out-of-the-money if the spot rate is lower than the exercise price. In this case, the exercise price of $1.3550 is higher than the current spot rate of $1.3427, making the option out-of-the-money.

Suppose the Current Spot Rate for the Euro Is $1