SIE practice questionhardIn/out/at the money
Which of the following statements is TRUE regarding a put option that is at-the-money?
- AIntrinsic value is positive
- BIntrinsic value is zero✓ Correct answer
- CTime value is zero
- DIt must be exercised early
Explanation
Why B — Intrinsic value is zero
An at-the-money put has zero intrinsic value; it only has time value. The other choices incorrectly interpret intrinsic or time value, or misuse exercise rules.
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