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A call option whose exercise price is greater than the spot rate is said to be at-the-money in-the-money around-the-money out-of-the-money None of the answers is correct The price at which an option can be purchased is called the option None of the answers is correct commission premium spot rate strike price
A call option whose exercise price is greater than the spot rate is said to be at-the-money in-the-money around-the-money out-of-the-money None of the answers is correct
The price at which an option can be purchased is called the option None of the answers is correct commission premium spot rate strike price
Expert Solution
1)Correct option: Out -of -the -money
A call option whose excercise price ( strike price) is greater than the spot rate is said to be Out -of -the -money.
Note :
A call option whose excercise price ( strike price) is approximately equal to the spot rate is said to be at -the -money.
A call option whose excercise price ( strike price) is lesser than the spot rate is said to be in -the -money.
2) correct option: Option premium.
The price at which an option can be purchased is called option premium
An option premium is the current market price of the option contract.
It is paid by the buyer to the seller upon the option contract.
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