The value of a put at expiration is defined as the:
A) minimum of zero or the stock price minus the exercise price.
B) minimum of zero or the exercise price minus the stock price.
C) maximum of zero or the stock price minus the exercise price.
D) maximum of zero or the exercise price minus the stock price.

Question

Quizplus · Accepted Answer

The value of a put option at expiration is the maximum of zero or the exercise price minus the stock price, as the holder will only exercise the option if it is in-the-money.

The Value of a Put at Expiration Is Defined as The