f you buy a put option on a stock at 110, and at expiration the market price is
ID: 2754373 • Letter: F
Question
f you buy a put option on a stock at 110, and at expiration the market price is 115,
the put will be exercised for a profit less than $5.
the put will be exercised for a $5 profit.
the put will not be exercised.
the put will be exercised for a loss more than $5.
the put will be exercised for a $5 loss.
A.the put will be exercised for a profit less than $5.
B.the put will be exercised for a $5 profit.
C.the put will not be exercised.
D.the put will be exercised for a loss more than $5.
E.the put will be exercised for a $5 loss.
Explanation / Answer
Answer : Answer 'C' is right. The put will not be exercised. Put is working when stock price is fall. If stock price is rise investment in Put will be waste.