A 3-Month Put Has a Strike Price of $45 and an Option

question 88

Multiple Choice

A 3-month put has a strike price of $45 and an option premium of $.80. The underlying stock is selling for $45.10 per share. What is the time value of the put?

• A)$0
• B)$.80
• C)$.90
• D)$1.60
• E)$1.90

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Definitions:

Demand Options

Various strategies a company can use to manage or influence customer demand for its products or services.

ESOs

Stock options provided to employees within their salary package permit them to acquire shares in the company at a fixed price, serving as part of their overall compensation.

Company Stock

Equity shares issued by a company representing ownership interests, giving shareholders voting rights and a claim on the company’s profits in the form of dividends.