Vidyalelo
Commerce · Q654

Financial Management

Graduate and Post Graduate · Commerce · question 654

Q654

According to put call parity relationship, call option plus present value of exercise price minus stock is to calculate

A.
present value of option
B.
call option
C.
put option
Answer
D.
future value of option

Answer: Option C

Solution

Answer: Option C
Solution:
According to put call parity relationship, call option plus present value of exercise price minus stock is to calculate put option. A put option is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time frame.