- 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
A call option that has a strike price ______ its market price is said to be ______ -the-money.
II. less than; out
III. equal to; at
I. greater than; in
II. less than; out
III. equal to; at
Correct Answer: III
In-the-money options have intrinsic value with a market price greater than the strike price. Out-of-the-money options are the opposite, while at-the-money options have a strike price equal to the market.
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