Suppose the current spot rate for the pound is $01.7427.A put option with an exercise price of $01.7550 is said to be
A)in-the-money
B)out-of-the-money
C)at-the-money
D)past breakeven

Question

Quizplus · Accepted Answer

A put option is in-the-money when the exercise price is above the current spot rate, as it allows the holder to sell the currency at a higher price than the current market rate. In this case, the exercise price ($01.7550) is higher than the current spot rate ($01.7427), making the put option in-the-money.

Suppose the Current Spot Rate for the Pound Is $01