Answer: USD 225,000

## Explanation An **asset-or-nothing put option** pays the **value of the underlying asset** at expiration if the option is in-the-money (i.e., if the stock price is below the strike price at expiration). It does **not** pay the difference between strike price and stock price like a standard put option. **Given:** - Number of shares: 5,000 - Strike price: USD 49 - Stock price at expiration: USD 45 - Option type: Asset-or-nothing put **Calculation:** Since the stock price at expiration (USD 45) is below the strike price (USD 49), the option is in-the-money and will pay: Payoff = Number of shares × Stock price at expiration Payoff = 5,000 × USD 45 = USD 225,000 **Why not the other options:** - **USD 20,000**: This would be approximately the payoff for a standard put option (5,000 × (49 - 45) = 20,000), but this is an asset-or-nothing option - **USD 35,000**: No logical basis for this amount - **USD 245,000**: This would be if the option paid the strike price (5,000 × 49 = 245,000), but asset-or-nothing options pay the actual stock price, not the strike price The correct answer is **USD 225,000**.

Author: LeetQuiz .