Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck:
-Assume you want to buy one option contract with an exercise price closest to being at-the-money and that expires January 2009.The current price that you would have to pay for such a contract is:
A)$680.
B)$380.
C)$650.
D)$420.

Question

Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck: 
-Assume you want to buy one option contract with an exercise price closest to being at-the-money and that expires January 2009.The current price that you would have to pay for such a contract is:
A)$680. 
B)$380. 
C)$650. 
D)$420.

Quizplus · Accepted Answer

The option contract with an exercise price closest to being at-the-money would typically have a higher premium due to its intrinsic value and time value. Among the given choices, $680 is the highest, indicating it is likely the price for an at-the-money option.

Use the Table for the Question(s)below