Suppose you buy a European put option on Euro with a strike $1.23 and a put premium of $.04/. If the spot rate at the expiry is $1.20/, this contingency is described by one of the following:

• A. The put option is in-the-money and your profit will be $.04/

• B. The put option is out-of-the-money and your loss will be $.01/

• C. The put option is in-the-money and your loss will be $.01/

• D. Even though the put option is in-the-money, you will not exercise it because the spot rate at expiry is less than the strike price

Please explain!