You have purchased a European style Put option (one contract) on the Euro at a strike price of Euro 1.5000=1 Pound. You have paid a premium of 1.20 Euro cents for this option. On the exercise date, spot Euros are quoted at Euro 1.5440=1 pound.

The net profit or loss on this option will be:

a) a profit of 4.50 Euro cents

b) a profit of 3.30 Euro cents

c) a loss of 1.20 Euro cents

d) a loss of 3.50 Euro cents

e) neither a profit nor loss, since you will not exercise the option

Why would the answer be (b) and not (c)?

Wouldn't the put option formula be Strike-Spot-Premium?