Question

Which of the following is FALSE

A In the Money Call: exercise price < asset price

B. In the Money Put: exercise price < asset price

C. Out of the Money Call: asset price < exercise price.

D. Out of the Money Put: asset price > exercise price.

E. At the Money Option: exercise price = asset price

Answer 1

A) For an in the money call option, the asset price is greater than the exercise price. The statement is True

B) For an in the money put option, the exercise price is greater than the asset price. The statement is False

C) For an out of the money call option , the asset price is les than the exercise price. The statement is True

D) FOr an out of the money put option, the asset price is greater than the exercise price. The statement is True

E) At the money options have equal strike and asset prices

The only statement that is incorrect is Statement B