A put option on a stock has an exercise price of $31.If the stock price at expiration is $29.45,what is the option payoff for a long put position?
A)$29.45
B)$0
C)$1.55
D)-$1.55
E)-$29.45

Question

Quizplus · Accepted Answer

The option payoff for a long put position is calculated as the exercise price minus the stock price if the stock price is less than the exercise price. In this case, the exercise price is $31 and the stock price at expiration is $29.45. Therefore, the option payoff is $31 - $29.45 = $1.55. The correct answer is C.

A Put Option on a Stock Has an Exercise Price