If the Stock Makes a Dividend Payment Before the Expiration

question 41

Multiple Choice

If the stock makes a dividend payment before the expiration date, then the put-call parity relation is

• A)Value of call = value of put + share price − present value (PV)of dividend − PV of exercise price.
• B)Value of call = value of put − share price + PV of dividend − PV of exercise price.
• C)Value of call = value of put + share price + PV of dividend + PV of exercise price.
• D)Value of call = value of put + share price + PV of dividend − PV of exercise price.

---

Definitions:

Conversation

The informal exchange of ideas, information, and feelings between two or more people through spoken words.

Traditional Writing Conventions

Established rules and norms governing the structure, grammar, and style of formal writing.

Volumes of Content

The amount or quantity of written or recorded material available on a particular subject.

Control Over Message

The ability to manage the content, timing, and medium of a communication to ensure it is received as intended.