SIE practice questionmediumIntrinsic value
A DEF Jul 60 put is trading for $3. DEF stock is currently $55. What is the intrinsic value of the put?
- A$3
- B$5✓ Correct answer
- C$0
- D$2
Explanation
Why B — $5
Put intrinsic value = strike - current price = $60 - $55 = $5. The $3 is total premium; intrinsic is $5.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Options questions
- If an option is deep in the money and close to expiration, its premium will consist primarily of which?
- An investor sells an uncovered (naked) put. What is the maximum potential loss?
- A short straddle profits when:
- If ABC is trading at $56 and the ABC 55 call is trading at $2.50, what is the intrinsic value?