Option Moneyness

This problem tests a basic options concept that comes up often in capital markets and sales and trading interviews. A candidate should know how to classify an option as in-the-money, out-of-the-money, or at-the-money by comparing the market price of the underlying asset with the strike price, and should understand the difference between intrinsic value and time value. Interviewers ask this because the concept is foundational for pricing, payoff analysis, and trading intuition, and it shows whether the candidate can explain option behavior clearly and precisely in market terms.