1. The fair market value of a near-month call option with a strike price of $45 is $5, when the stock is trading at $48.

Based on the preceding information, the call option:

• has no intrinsic value currently.

• is at the money.

• is out of the money.

• is in the money.

• 2. In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.

  Refer to the information provide above. Erin invests $50,000 for a one-fifth interest in the total capital of $230,000. What are the capital balances of Jacob and Katy after Erin is admitted into the partnership?

  	Jacob			Katy
  A.	$	142,400		$	41,600
  B.	$	142,000		$	42,000
  C.	$	140,000		$	40,000
  D.	$	137,600		$	38,400