Multiple Choice
We have a stock selling for $90.00. There is a put option for this stock with a strike price of $85 and an option price of $1.20:
A) the intrinsic value of this option is $0.00 and the time value of the option is $1.20.
B) the intrinsic value of this option is $90.00 and the time value of the option is $1.20.
C) the intrinsic value of this option is -$5.00 and the time value of the option is $1.20.
D) you cannot determine the intrinsic value or time value of the option since the strike price is less than the underlying asset price.
Correct Answer:
Verified
Correct Answer:
Verified
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