Put-Call Parity Is Based on Which One of the Following

question 33

Multiple Choice

Put-call parity is based on which one of the following principles?

• A)Binomial tree
• B)Time value of money
• C)No arbitrage
• D)Normality of returns

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Definitions:

Balance Sheet

A financial statement that displays a company's assets, liabilities, and equity at a specific point in time, providing a snapshot of its financial position.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.

Affect Inventories

Influences on the quantity, value, or type of products a business holds for sale, resulting from factors like demand fluctuations and supply chain issues.

Expense Recognition Principle

An accounting guideline that expenses should be recognized in the period in which they are incurred, regardless of when the payment is made.