A PUT and a CALL option are written on a stock with a strike price of $60. The options are held until expiration. Suppose the stock price at expiration is $75. Call premium is $16 and Put premium is $3. The CALL option will ___ because the call is ___. But the PUT option will ___ because the put is ___, with a TIME VALUE of ___. a) Be exercised; in-the-money; not be exercised; out-of-the-money; zero b) not be exercised; out-of-the-money; be exercised; in-the-money; zero c) Be exercised; in-the-money; not be exercised; out-of-the-money; 1 d) Be exercised; in-the-money; be exercised; in-the-money; zero e) None of the above is correct
A PUT and a CALL option are written on a stock with a strike price of $60. The options are held until expiration. Suppose the stock price at expiration is $75. Call premium is $16 and Put premium is $3. The CALL option will ___ because the call is ___. But the PUT option will ___ because the put is ___, with a TIME VALUE of ___. a) Be exercised; in-the-money; not be exercised; out-of-the-money; zero b) not be exercised; out-of-the-money; be exercised; in-the-money; zero c) Be exercised; in-the-money; not be exercised; out-of-the-money; 1 d) Be exercised; in-the-money; be exercised; in-the-money; zero e) None of the above is correct
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A PUT and a CALL option are written on a stock with a strike
price of $60. The options are held until expiration.
Suppose the stock price at expiration is $75. Call premium is $16 and Put premium is $3. The CALL option will ___ because the call is ___. But the PUT option will ___ because the put is ___, with a TIME VALUE of ___.
a) Be exercised; in-the-money; not be exercised; out-of-the-money; zero
b) not be exercised; out-of-the-money; be exercised; in-the-money; zero
c) Be exercised; in-the-money; not be exercised; out-of-the-money; 1
d) Be exercised; in-the-money; be exercised; in-the-money; zero
e) None of the above is correct
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