An option that would NOT yield a positive payoff if exercised today is referred to by which one of the following terms?
A)hollow option
B)zero option
C)in-the-cellar option
D)out-of-the-money option
E)strike-out

Question

Quizplus · Accepted Answer

An option that is out-of-the-money, meaning its current market value is less than the strike price, would not yield a positive payoff if exercised today. Therefore, the correct term is out-of-the-money option.

An Option That Would NOT Yield a Positive Payoff If