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FINRA Series 7

Category - Series 7

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A call option is in the money when the market value of the underlying stock is:

lower than the strike price of the option
the same as the strike price of the option
higher than the strike price of the option
higher than the strike price plus the premium

Explanation

Answer: C - higher than the strike price of the option. The premium paid is not relevant. All that matters is the strike price of the option relative to the market value of the underlying stock.

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