The intrinsic value of a put is equal to the:
A)lesser of the strike price or the stock price.
B)lesser of the stock price minus the exercise price or zero.
C)lesser of the stock price or zero.
D)greater of the strike price minus the stock price or zero.
E)greater of the stock price minus the exercise price or zero.

Question

Quizplus · Accepted Answer

The intrinsic value of a put option is calculated as the greater of the strike price minus the stock price or zero. This represents the value the put option would have if it were exercised immediately. If the stock price is below the strike price, the put has intrinsic value; if the stock price is above the strike price, the intrinsic value is zero, as the option would not be exercised.

The Intrinsic Value of a Put Is Equal to The