If the Underlying Stock Pays a Dividend Before the Expiration

question 70

Multiple Choice

If the underlying stock pays a dividend before the expiration of the options that will have the following effect on the price of the options:
I. increase the value of the call option II) increase the value of the put option
III. decrease the value of the call option
IV. decrease the value of the put option

• A) I and II only
• B) III and IV only
• C) I and IV only
• D) II and III only

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