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Canadian Securities Course (CSC) Practice Exam · Question

Which of the following best describes an 'in-the-money' call option?

A call option is in-the-money when the market price of the underlying asset is above the option's strike price, meaning the option holder could exercise and pro

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Question: Which of the following best describes an 'in-the-money' call option?

Answer options: ✅ The strike price is below the current market price of the underlying asset.

  • The strike price is above the current market price of the underlying asset.
  • The strike price is equal to the current market price of the underlying asset.
  • The option has not yet expired and has intrinsic value.

Correct answer: The strike price is below the current market price of the underlying asset.

Explanation: A call option is in-the-money when the market price of the underlying asset is above the option's strike price, meaning the option holder could exercise and profit immediately.

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