Helen purchased a put option that had an exercise price of $50, a premium of $2, five months to expiration, and a stock price of $52. At expiration the stock was selling at $54. What profit/loss did Helen earn? Assume the option was for one share of stock.
A) -$4
B) -$2
C) 0
D) +$2

Question

Quizplus · Accepted Answer

The option is out of the money at expiration, so Helen loses the premium she paid, which is $2.

Helen Purchased a Put Option That Had an Exercise Price