Chapter 03 · Section 3.1
Put option
Intrinsic value is the difference between the current value of the underlying asset and the exercise price. N.B. The intrinsic value cannot be negative.
The intrinsic value of a put option is equal to:
a) the price of the underlying asset.
b) the exercise price.
c) the price of the underlying asset minus the exercise price.
d) the exercise price minus the price of the underlying asset.
If the price of the underlying asset is 80 and the excercise price of the option is 90, the intrinsic value would be 10.