CMSA Practice Questions - Capital Markets & Securities Analyst Exam

Which of the following is the payoff at expiration for the buyer of a European put option?

Max(0, Strike Price - Spot Price) Max(0, Spot Price - Strike Price) Strike Price - Spot Price (can be negative) Spot Price - Strike Price (can be negative)

Correct Answer:

Max(0, Strike Price - Spot Price)

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