If the stock makes a dividend payment before the expiration date, then the put-call parity relation is Value of call = value of put − share price + PV of dividend − PV of exercise price. None of the above. Value of call = value of put + share price + PV of dividend + PV of exercise price. Value of call = value of put + share price − PV of dividend − PV of exercise price. Value of call = value of put + share price + PV of dividend − PV of exercise price.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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If the stock makes a dividend payment before the expiration date, then the put-call parity relation is

   

Value of call = value of put − share price + PV of dividend − PV of exercise price.

 

   

None of the above.

   

Value of call = value of put + share price + PV of dividend + PV of exercise price.

   

Value of call = value of put + share price − PV of dividend − PV of exercise price.

   

Value of call = value of put + share price + PV of dividend − PV of exercise price.

 

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