Suppose the current spot rate is 140 a currency option with

Suppose the current spot rate is $1.40/€, a currency ____ option with a strike of a $1.25/€ is said to be ________.

Select one:

a. call, out-of-the money

b. call, in-the-money

c. put, in-the-money

d. put, at-the-money

Solution

Ans) the correct option is b. call, in-the-money. In the money States that a call option\'s strike price is below the market price of the underlying asset