Question
In: Finance
A put option on an IBM stock has a strike price of $125. The holder of...
A put option on an IBM stock has a strike price of $125. The holder of this put option exercises the option today when the price of IBM stock is $122. This means that the holder of the put option_____ sells an IBM share today at the price of $122 sells an IBM share today at the price of $125 buys an IBM share at the price of $125 sells the option contract today for a price of $125
Solutions
Expert Solution
In this case the put option has the strike price of 125 so whenever the put option holder will be exercising this option he will be exercising it at 125 because even if the market price is 122, he will sell it at 125 and hence this will be the benefit of the option holder because it will be a right to him not an obligation. He will be entitled to sell shares at strike price.
Correct answer will be SELLS AN IBM SHARE TODAY AT THE PRICE OF $125.
jeff jeffy answered 2 years agoRelated Solutions
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A
put option gives the holder
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