1. Which of the following statements is true about a European put option?

It can be exercised only on the expiration date.

The holder of the option will exercise the option only if the price of the underlying asset is greater than the strike price.

It can be exercised on or before the expiration date.

It can be exercised only if the price of the underlying asset is above the strike price.

2. A call and a put option on a stock trading at $55 both have an exercise price of $50. Which statements are correct?

Check all that apply:

The put is out of the money.

The call is in the money.

The call is out of the money.

The put is in the money.

3. Which of the following statements are true about the intrinsic value of an option?

Check all that apply:

The intrinsic value of an in-the-money call option is equal to the price of the underlying asset minus the strike price.

The intrinsic value of an in-the-money put option is equal to the price of the underlying asset plus the strike price.

The intrinsic value of an at-the-money put option is zero.

The intrinsic value of an at-the-money call option is zero.

The intrinsic value of an out-of-the-money put option is zero.