Question

A put option with several months until expiration has a strike price of $55 when the stock price is $50. the option has _____ intrinsic value and _____ time value.

Answer 1

I had to look for the options and here is my answer:
Based on the blanks provided above, the answers would be ZERO and POSITIVE, respectively. Therefore, in a call option that has many months until it expires has a strike price of $55 when the given price of the stock is $50. Therefore, the option has ZERO intrinsic value and POSITIVE time value.