Which of the following statements is true? A) Both call and put options are in t

Question

Which of the following statements is true?

         A) Both call and put options are in the money if the stock price is above the exercise price.

         B) Both call and put options are in the money if the stock price is below the exercise price.

         C) Call options are in the money if the stock price is above the exercise price. Put options are in the money if the stock price is below the exercise price.

         D) Call options are in the money if the stock price is below the exercise price. Put options are in the money if the stock price is above the exercise price.

         E) None of the above.

Explanation / Answer

D) Call options are in the money if the stock price is below the exercise price. Put options are in the money if the stock price is above the exercise price.

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