Explanation:

The profit for the buyer of a put option is calculated as the difference between the put's value at expiration and the premium paid. The put's value at expiration is given by:

$P_t = \max(0, X - S_t)$

where:

• $P_t$ is the value of the put at expiration,
• $X$ is the exercise price,
• $S_t$ is the price of the underlying asset at expiration.

For this question:

• $X = 45$ (exercise price),
• $S_t = 41$ (underlying price at expiration).

Thus, the put's value at expiration is:

P_t = \max(0, 45 - 41) = \`$4`

The buyer's profit is then:

\text{Profit} = P_t - P_0 = 4 - 2 = \`$2`

where P_0 = \`2` $ is the premium paid for the put option.

Why not A or C?

• A ($-2) represents the seller's profit, not the buyer's.
• C ($4) is the put's value at expiration, not the profit.