Final answer:
The intrinsic value of the June $30 put option on Leeper Metals stock is calculated as $30 (strike price) - $27.50 (current stock price) = $2.50 per share, resulting in $250 for a contract representing 100 shares.
Step-by-step explanation:
The question pertains to the calculation of the intrinsic value of a put option contract. To determine the intrinsic value, we consider the strike price of the put option, which is $30, and the current market price of Leeper Metals stock, which is $27.50.
The intrinsic value of a put option is calculated as the difference between the strike price and the stock price, provided that the put option is in the money (meaning the stock price is below the strike price).
In this case, $30 - $27.50 equals $2.50. Since each option contract typically represents 100 shares, the intrinsic value of the put contract is $2.50 X 100, which equates to $250. Therefore, the correct answer is A. $250, as this reflects the profit that an investor could potentially make if they exercised their put option at this point.