The current market price of a share of CSCO stock is $22. If a call option on this stock has a strike price of $20, the call
A) is out of the money.
B) is in the money.
C) sells for a higher price than if the market price of CSCO stock is $21.
D) is out of the money and sells for a higher price than if the market price of CSCO stock is $21.
E) is in the money and sells for a higher price than if the market price of CSCO stock is $21.

Question

Quizplus · Accepted Answer

If the striking price on a call option is less than the market price, the option is in the money and sells for more than a less in the money option.

The Current Market Price of a Share of CSCO Stock