Answer: -$3

## Explanation For a put option buyer: - **Put option premium (cost)**: $4 (paid by buyer) - **Exercise price**: $58 - **Underlying price at expiration**: $57 **Profit calculation for put buyer**: 1. **Intrinsic value at expiration**: Exercise price - Underlying price = $58 - $57 = $1 2. **Profit**: Intrinsic value - Premium paid = $1 - $4 = -$3 **Step-by-step reasoning**: - The put buyer has the right to sell the underlying at $58 - At expiration, the underlying is worth $57, so the put option has intrinsic value of $1 ($58 - $57) - However, the buyer paid $4 for the option, so their net profit is $1 - $4 = -$3 - This represents a loss of $3 **Why other options are incorrect**: - **Option B ($1)**: This is only the intrinsic value, not accounting for the premium paid - **Option C ($3)**: This would be the profit if the underlying price was $54 ($58 - $54 = $4 intrinsic value, $4 - $4 = $0 profit) or if the premium was $1 instead of $4 The correct answer is **A (-$3)** because the put buyer's profit is calculated as: (Exercise Price - Underlying Price) - Premium Paid = ($58 - $57) - $4 = -$3

Author: LeetQuiz .