Which of the Following Is True for American Options

question 7

Multiple Choice

Which of the following is true for American options?

• A)Put-call parity provides an upper and lower bound for the difference between call and put prices
• B)Put call parity provides an upper bound but no lower bound for the difference between call and put prices
• C)Put call parity provides an lower bound but no upper bound for the difference between call and put prices
• D)There are no put-call parity results

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Definitions:

Non-controlling Interest

A shareholder's equity in a subsidiary that is not attributable to the parent company, representing minority ownership.

Consolidated Net Income

The total earnings of a corporation, after tax, including earnings from subsidiaries, before distributing dividends.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, without adjustment for increases or decreases in market value.

Goodwill

An intangible asset arising when a company acquires another for more than the fair value of its net identifiable assets.