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A 90-day put option for 10,000 ABC ordinary shares has an exercise price of 32 per share. The current risk-free rate 5% and the market value of the shares is 30. Based on those information, the intrinsic value of the put option is? a.) 0 b.) 20,000 c.) -20,000 d.) 19,750

A 90-day put option for 10,000 ABC ordinary shares has an exercise price of 32 per share. The current risk-free rate 5% and the market value of the shares is 30. Based on those information, the intrinsic value of the put option is? a.) 0 b.) 20,000 c.) -20,000 d.) 19,750

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A 90-day put option for 10,000 ABC ordinary shares has an exercise price of 32 per share. The current risk-free rate 5% and the market value of the shares is 30. Based on those information, the intrinsic value of the put option is?

a.) 0

b.) 20,000

c.) -20,000

d.) 19,750

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