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A Put Is the Option to Sell Stock at $35

question 8

Essay

A put is the option to sell stock at $35. The price of the stock is $34, and the price of the put is $2.​

a. What is the intrinsic value of the put?

b. What is the time premium paid for the put?

c. What is the percentage return on an investment in the put if at the expiration of the put the price of the stock is $31?


Definitions:

Year-End Payments

Financial obligations that are due or paid at the end of the fiscal year, such as bonuses or tax liabilities.

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