- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 2. Forward Commitment and Contingent Claim Features and Instruments
- Subject 2. Contingent Claims: Options
CFA Practice Question
An in-the-money call option is one ______
II. that has positive value if exercised.
III. that has an exercise price above the current market price of the underlying security.
I. that has an exercise price below the current market price of the underlying security.
II. that has positive value if exercised.
III. that has an exercise price above the current market price of the underlying security.
Correct Answer: I and II
User Contributed Comments 2
| User | Comment |
|---|---|
| sshetty2 | We don't factor in the premium? |
| mcbreatz | You would still exercise the option if it is in the money even if it was just to offset part of the premium you paid. |