Anonymous
Anonymous asked in Business & FinanceCorporations · 9 years ago

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the?

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the different exercise prices, the call option with the _____ exercise price and the put option with the _____ exercise price will have the greatest value.

A. $40; $30

B. $30; $40

C. $35; $35

D. $40; $40

1 Answer

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  • ?
    Lv 4
    9 years ago
    Favorite Answer

    B.

    Call options value increases with lower strike price while put options value increases with higher strike price. This is known as "moneyness".

    Source(s): http://www.optiontradingpedia.com/options_moneynes... - Tutorial on Options Moneyness
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