An investor purchased Option A and Option B for a certain stock today, with strike prices 70

Question:

An investor purchased Option A and Option B for a certain stock today, with strike prices 70 and 80, respectively. Both options are European one-year put options.

Determine which statement is true about the moneyness of these options, based on a particular stock price.

(A) If Option A is in-the-money, then Option B is in-the-money.

(B) If Option A is at-the-money, then Option B is out-of-the-money.

(C) If Option A is in-the-money, then Option B is out-of-the-money.

(D) If Option A is out-of-the-money, then Option B is in-the-money.

(E) If Option A is out-of-the-money, then Option B is out-of-the-money.

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