(SOLVED) Suppose you buy a put option on ABC Inc. for $2.00 that expires in three months with a strike price of $10.00. Currently ABC is trading at $10.35 per share.
Discipline: Finance
Type of Paper: Question-Answer
Academic Level: Undergrad. (yrs 1-2)
Paper Format: APA
Pages: 1
Words: 25
Question
Suppose you buy a put option on ABC Inc. for $2.00 that expires in three months with a strike price of $10.00.
Currently ABC is trading at $10.35 per share. The intrinsic and time value on this option is closest to?
Expert Solution Preview
Intrinsic value of put option
= strike price - underlying price
= $0.00 [10-10.35] {cannot be negative}
Time value = .....
