Because of the put-call parity relationship, under equilibrium conditions a put option on a stock must sell at exactly the same price as a call option on the stock, provided the strike prices for the put and call are the same.
Answer the following statement true (T) or false (F)
False
Rationale: Recognize that if a stock is selling far above the strike price, the call option will be quite valuable, but the put option will be worth very little because the probability is low that the stock's market price will fall below the put's strike price.
You might also like to view...
You have just received a check. Your account number is # 5391-2165. Write the endorsement and identify what type it is, allowing you to deposit the check in your checking account.
What will be an ideal response?
If there are 10 groups and 8 predictors, how many discriminant functions can be estimated?
A) ten B) nine C) eight D) seven
Cash budgeting is important to which of the following?
A) retail stores B) manufacturing firms C) not for profit agencies D) local government agencies E) all of these
"Jin, I'm going to put you in charge of the production team for our first shift, and your team will be fully responsible for our entire production process and the products made during that shift. Your team will make decisions and be responsible for a complete range of tasks, including purchasing of materials, oversight of quality control, maintenance, and shipping." Jin will be leading a work team called
A. an autonomous work group. B. a parallel team. C. a quality circle. D. a traditional work group. E. a semiautonomous work group.