A call option in which the stock price is higher than the exercise price is said to be
A) At-the-money.
B) In-the-money.
C) Before-the-money.
D) Out-of-the-money.
E) Above-the-money.

Question

Quizplus · Accepted Answer

A call option is said to be in-the-money when the current market price of the underlying stock is higher than the exercise price (also referred to as strike price). This means that the holder of the option can buy the stock at a discount and immediately sell it in the market for a profit.

A Call Option in Which the Stock Price Is Higher