The strike price of a put option for a particular stock is $48. If the stock is selling for $45 on the expiration date, a put option on this stock has an intrinsic value of __________ per share.
A) $48
B) $45
C) $3
D) $0

Question

Quizplus · Accepted Answer

The intrinsic value of a put option is equal to the strike price minus the market price of the underlying stock. In this case, the intrinsic value is $48 - $45 = $3. Therefore, the best choice is C.

The Strike Price of a Put Option for a Particular