A put exists with the option to sell a stock at $35. The price of the stock is $34, and the price of the put is $2.

a. What is the intrinsic value of the put?

b. What is the time premium paid for the put?

c. What is the percentage return from purchasing the put if, at the expiration of the put, the price of the stock is $31?

Question

A put exists with the option to sell a stock at $35. The price of the stock is $34, and the price of the put is $2. 
 ​ 
 a. What is the intrinsic value of the put? 
 ​ 
 b. What is the time premium paid for the put? 
 ​ 
 c. What is the percentage return from purchasing the put if, at the expiration of the put, the price of the stock is $31?

Quizplus · Accepted Answer

The Answer of A put exists with the option to sell a stock at $35. The price of the stock is $34, and the price of the put is $2. 
 ​ 
 a. What is the intrinsic value of the put? 
 ​ 
 b. What is the time premium paid for the put? 
 ​ 
 c. What is the percentage return from purchasing the put if, at the expiration of the put, the price of the stock is $31?

A Put Exists with the Option to Sell a Stock