An option with an exercise price equal to the underlying asset's price is
A)worthless.
B)in the money.
C)at the money.
D)out of the money.

Question

Quizplus · Accepted Answer

An option with an exercise price equal to the underlying asset's price is called an "at the money" option. It is neither "in the money" nor "out of the money." It is not immediately profitable to exercise this option, as the underlying asset's price needs to move up or down significantly before the option holder can make a profit.

An Option with an Exercise Price Equal to the Underlying