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.