Under what circumstance will the buyer of a put option need to fulfill her obligation?
A) When the stock price has declined below the exercise price.
B) When the stock price has increased above the exercise price.
C) The put buyer has an equal obligation regardless of the relationship between stock and exercise prices.
D) The put buyer has no obligation.

Question

Quizplus · Accepted Answer

The buyer of a put option has the right, but not the obligation, to sell the underlying asset at the exercise price. Therefore, they are not required to fulfill any obligation.

Under What Circumstance Will the Buyer of a Put Option