A put option has an intrinsic value of zero if the option is
A)at the money.
B)out of the money.
C)in the money.
D)at the money and in the money.
E)at the money and out of the money.

Name: A put option has an intrinsic value of zero if the option is A)at the money. B)out of the money. C)in the money. D)at the money and in the money. E)at the money and out of the money.
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Question

Quizplus · Accepted Answer

Intrinsic value can never be negative; thus it is set equal to zero for out of the money and at the money options.

A Put Option Has an Intrinsic Value of Zero If