Answer: A put with an exercise price of 83 and an underlying priced at 72

## Explanation At expiration, the value of an option is determined by its intrinsic value only (time value is zero at expiration). Let's calculate the intrinsic value for each option: **Option A:** Put with exercise price = 72, underlying price = 83 - Put option value = max(0, exercise price - underlying price) = max(0, 72 - 83) = max(0, -11) = 0 - This put is out-of-the-money (underlying price > exercise price) **Option B:** Put with exercise price = 83, underlying price = 72 - Put option value = max(0, exercise price - underlying price) = max(0, 83 - 72) = max(0, 11) = 11 - This put is in-the-money (underlying price < exercise price) **Option C:** Call with exercise price = 83, underlying price = 70 - Call option value = max(0, underlying price - exercise price) = max(0, 70 - 83) = max(0, -13) = 0 - This call is out-of-the-money (underlying price < exercise price) **Comparison:** - Option A value = 0 - Option B value = 11 - Option C value = 0 Therefore, **Option B** has the greatest value at expiration with an intrinsic value of 11. **Key Concept:** At expiration, option value equals intrinsic value only. For puts: value = max(0, exercise price - underlying price). For calls: value = max(0, underlying price - exercise price).

Author: LeetQuiz .