A call option described as out of the money would find:
A) the market price of the stock is above the strike price.
B) the option has been exercised.
C) the option has expired.
D) the strike price is above the market price of the stock.

Question

Quizplus · Accepted Answer

An out of the money call option means that the strike price of the option is higher than the current market price of the stock. Therefore, the option would not be exercised as the buyer would not make a profit by buying the stock at a higher price than its current market value. The option may or may not have expired, but it has not been exercised.

A Call Option Described as Out of the Money Would