Calculate the value of a long put if the exercise price is $10.00,the premium is $1.50 and the spot price is $8.00,given V=max(X-S,0)- P.

Question

Quizplus · Accepted Answer

The value of a long put is calculated as V = max(X - S, 0) - P, where X is the exercise price, S is the spot price, and P is the premium. Here, X = $10.00, S = $8.00, and P = $1.50. Thus, V = max(10 - 8, 0) - 1.5 = 2 - 1.5 = $0.50.

Calculate the Value of a Long Put If the Exercise