A Portfolio Containing a Share of Stock and a Put

question 57

True/False

A portfolio containing a share of stock and a put option will have the same value as a portfolio containing a call option and the risk-free discount bond.

---

Definitions:

Earnings Per Share

A measure of a company's profitability, calculated as the net income divided by the number of outstanding shares of its common stock.

Stockholder Control

The influence and authority stockholders have over the management and strategic decisions of a corporation, often exercised through voting rights associated with shares.

State Laws

Laws enacted by individual states within a country, governing within their territories and subject to the constitution of that country.

Corporations

Legal entities that are separate from their owners, providing limited liability protection, the ability to raise capital through stock issuance, and perpetual existence.