Answer: USD 225,000

## Explanation An **asset-or-nothing put option** pays the holder the **current asset price** if the underlying asset price is **below the strike price** at expiration. It does **not** pay the difference between strike and asset price like a standard put option. **Given:** - Number of shares: 5,000 - Strike price: USD 49 - Stock price at expiration: USD 45 - Since 45 < 49, the option is in-the-money **Calculation:** - Payoff = Current asset price × Number of shares - Payoff = USD 45 × 5,000 = USD 225,000 **Why other options are incorrect:** - **A (USD 20,000)**: This would be the payoff from a standard put option: (49 - 45) × 5,000 = 4 × 5,000 = 20,000 - **B (USD 35,000)**: This appears to be (52 - 45) × 5,000 = 7 × 5,000 = 35,000, which incorrectly uses the initial stock price instead of the strike price - **D (USD 245,000)**: This is simply strike price × shares: 49 × 5,000 = 245,000, which is not how asset-or-nothing options work The key distinction is that asset-or-nothing options pay the **current asset value** when in-the-money, not the difference between strike and asset price.

Author: LeetQuiz .