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Rene purchased a Put Option on Royal Caribbean Group nearly 3 months ago for $3.25. The strike price is: and at the time of
Rene purchased a Put Option on Royal Caribbean Group nearly 3 months ago for $3.25. The strike price is: and at the time of purchase the stock price was $51. Now the stock price is: $45.20 a) At the time of purchase, what was the intrinsic value of the Put Option? b) What is the intrinsic value of the Put Option today? c) What is her profit or loss on the transaction if she exercises the Put Option today? d) What is the maximum profit that she could potentially make before the Put Option expires? ANSWERS: a) Intrinsic Value of the Put at purchase b) Intrinsic Value of the Put today c) Profit or Loss if exercised today d) Put's Maximum profit possible $ 47.00
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