An investor has exchange-traded put options to sell 100 shares for $20 . There is a $1 cash dividend. Which of the following is then the position of the investor?

A. The investor has put options to sell 100 shares for $20
B. The investor has put options to sell 100 shares for $19
C. The investor has put options to sell 105 shares for $19
D. The investor has put options to sell 105 shares for $19.05


A

Cash dividends unless they are unusually large have no effect on the terms of an option.

Business

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