The intrinsic value of an at-the-money put option is equal to
A)the stock price minus the exercise price.
B)the put premium.
C)zero.
D)the exercise price minus the stock price.
E)none of the above.

Question

Quizplus · Accepted Answer

The intrinsic value of a put option is the difference between the strike price and the stock price if the option is in-the-money (when the strike price is above the stock price). Therefore, if the put option is at-the-money, the intrinsic value is zero.

The Intrinsic Value of an At-The-Money Put Option Is Equal