A Stock Has Both a Call and a Put Option

question 8

Multiple Choice

A stock has both a call and a put option outstanding. The exercise price was set equal to the stock price. If the option were to expire now what would be the minimum value of the call and the put respectively?

• A) (S_T - E); ³ 0.
• B) 0; (S_T - E).
• C) <0; >0.
• D) 0; 0.
• E) (E - S_T); (S_T - E).

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Definitions:

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A marketing strategy that uses the fame of a celebrity to promote products or services.

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