An investor purchased Call X and Call Y for a certain stock today, with strike prices 50
Question:
An investor purchased Call X and Call Y for a certain stock today, with strike prices 50 and 60, respectively. Both options are European options with the same time to expiration.
Determine which of the following statements is true about the moneyness of these options, based on a particular stock price.
(A) If Call X is in-the-money, then Call Y is in-the-money.
(B) If Call X is at-the-money, then Call Y is in-the-money.
(C) If Call X is in-the-money, then Call Y is out-of-the-money.
(D) If Call X is out-of-the-money, then Call Y is in-the-money.
(E) If Call X is out-of-the-money, then Call Y is out-of-the-money.
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