A stock currently sells for $75 per share.A put option on the stock with an exercise price $70 currently sells for $0.50.The put option is
A) At-the-money.
B) In-the-money.
C) Out-of-the-money.
D) At breakeven.
E) None of the above.

Question

Quizplus · Accepted Answer

A put option is out-of-the-money when the stock price is above the exercise price. Here, the stock price ($75) is higher than the exercise price ($70), making the put option out-of-the-money.

A Stock Currently Sells for $75 Per Share