Chapter 03 · Section 3.1

In, At, or Out of the Money

                    CALL                          PUT         
 Exercise    Mar      Jun      Sep           Mar      Jun     Sep 
 Price                                                              
 30         10.15    10.85     11.65         0.05     0.35    0.85 
 35          5.40     6.90      8.10         0.25     1.35    2.15 
 40          1.90     4.00      5.35         1.75     3.40    4.35 
 45          0.40     2.10      3.45         5.30     6.50    7.40 
 50          0.05     1.05      2.15        10.05    10.50   11.15 

                Stock price: $40    Today's date: February         

The option in bold is:

a) At-the-money
b) In-the-money
• c) Out-of-the-money
  No. The option in bold has an intrinsic value (difference between the stock price and the exercise price) equal to zero, and thus cannot be out of the money.

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