SIE - Securities Industry Essentials Exam
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An investor buys a May 25 Put for 6.00. On expiration day the stock is trading at $23.00. What is the intrinsic value of the put on this day?
$200
A
$300
B
$400
C
$500
D
Explanations
The intrinsic value on expiration day is the total value of the option. The option is $2.00 in the money; and therefore has an intrinsic value of $200.00.