A put option gives the option holder the right to sell an asset at a fixed price during a particular period.
If the current price is below the strike price then the put option has money.
Thus, according to above question, option 2 is in the money.
What is a put option and American option?
A put option gives the option holder the right to sell an asset at a fixed price during a particular period.
American option is when a put option can be exercised on or before the expiry date.
If the current price is below the strike price then the put option has money.
Thus, according to above question, option 2 is in the money.
If the price of the underlying is above the put option strike, then the value of the put option would be zero.
The value of the put option likely to increase if the stock price decreases.
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