Suppose a put option is traded at $3. The underlying stock of the option is traded at $105 per share at the same time. The option expiresin 3 months and has a strike price of $104. What is the intrinsic value of the option? Is the option in the money, at the money, or out ofthe money?

Intrinsic value of put option can be calculated from strike price and spot prices.

of the option is traded at $105 per share at the same time. The option ths and has a strike price of $104. What is the intrinsic value of the option? Is the option in the money, at the money, or on ey?

of the option is traded at $105 per share at the same time. The option ths and has a strike price of $104. What is the intrinsic value of the option? Is the option in the money, at the money, or on ey?

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

Suppose a put option is traded at $3. The underlying stock of the option is traded at $105 per share at the same time. The option expires
in 3 months and has a strike price of $104. What is the intrinsic value of the option? Is the option in the money, at the money, or out of
the money?

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