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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