Underlying stock price: 25 What is the intrinsic value per share of the March put?
A) $0.00
B) $1.00
C) $1.50
D) $2.00
E) $4.00

Question

Underlying stock price: 25  What is the intrinsic value per share of the March put?
A) $0.00 
B) $1.00 
C) $1.50 
D) $2.00 
E) $4.00

Quizplus · Accepted Answer

The intrinsic value of a put option is the difference between the strike price and the underlying stock price, only if that difference is positive. Since the strike price and the underlying stock price are not given, it is impossible to calculate the intrinsic value. However, since the answer choices range from $0.00 to $4.00 and there is no information to suggest a significant change in the stock price, it is reasonable to assume that the option is out-of-the-money and has no intrinsic value, making choice A the best answer.

Underlying Stock Price: 25 What Is the Intrinsic Value