Assume you pay a premium of $0.70/bu for a call option with a strike price of $6.00/bu and that the current futures price is $6.50/bu. Then, the option is:
A. In-the-money
B. At-the-money
C. Out-of-the-money
D. Worthless
Answer: A. In-the-money
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Which of the following is an example of a physical capital?
A) A factory B) A worker C) A stock D) A bond
If a straight line passes through the point x = 12 and y = 4 and also through the point x = 4 and y = 8, the slope of this line is
A) seven tenths. B) negative 8 divided by 4. C) one -and one half. D) negative one half.
When a firm produces output,
A) The value of the output produced is included in GDP B) The firm's output contributes to GDP only to the extent that there is value-added. C) The firm's output will not count as GDP if it is stored as inventory. D) The firm's output will not count as GDP if it is exported.
Economic goods are items that
A) are used only by economists. B) provide satisfaction to users. C) cannot be sold at any price in the market. D) individuals would pay to get rid off.