Final answer:
Amber's call option on Swiss francs, with a strike price of $0.65/SF, is in the money because the current spot rate of $0.85/SF is higher than the strike price.
Step-by-step explanation:
Amber's call option on Swiss francs is considered to be in the money. This status is determined by comparing the strike price of the option with the current spot rate of the Swiss francs. Since Amber's strike price is $0.65/SF and the current spot rate is $0.85/SF, the value of the Swiss francs is higher than the strike price. If Amber exercises her option, she can buy the francs at the cheaper strike price of $0.65/SF and could potentially sell them immediately in the spot market at $0.85/SF. The premium that Amber paid, which is $0.26/SF, is the cost for having this opportunity and does not affect whether the option is in or out of the money; it would, however, affect the overall profitability of exercising the option.