Answered: A put option on a stock has an exercise…

A put option on a stock has an exercise price of $31. If the stock price at expiration is $33.40, what is the option payoff for a short put position? A) $33.40 B) $2.40 C) -$2.40

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter5: Financial Options

Section: Chapter Questions

Problem 1P

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Question

A put option on a stock has an exercise price
of $31. if the stock price at expiration is
$33.40, what is the option payoff for a short
put position?
A) $33.40
B) $2.40
C) -$2.40
D) -$33.40
E) $0

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