If the Stock Makes a Dividend Payment Before the Expiration

question 60

Multiple Choice

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

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Definitions:

Warm-up

Activities or exercises performed before a workout or physical activity to prepare the body and reduce the risk of injury.

Cool-down

A series of gentle exercises done after more intense physical activity to gradually lower the body's temperature and heart rate.

Aerobic Endurance

The ability of the heart and lungs to deliver oxygen to the body's tissues during prolonged physical activity.

Glycolysis

A metabolic pathway that breaks down glucose into pyruvate, releasing energy and forming ATP, commonly occurring in nearly all living cells.