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Which of the following statements are correct 1 A put option...

This question belongs to Management International Finance And Treasury
International Finance and Treasury
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Which of the following statements are correct?
1. A put option is said to bein the money or favourable for the option holder when the strike price is higher than the spot price.
2. A put option is said to be out of money when the strike price is lower than the market price.
3. Fir an option writer the maximum gain is the amount of premium received by the put option holder.

Answer & Solution
Correct Answer: Option B
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