To Compute the Value of a Put Using the Black-Scholes

question 29

Multiple Choice

To compute the value of a put using the Black-Scholes option pricing model, you:

• A) first have to apply the put-call parity relationship.
• B) first have to compute the value of the put as if it is a call.
• C) compute the value of an equivalent call and then subtract that value from one.
• D) compute the value of an equivalent call and then subtract that value from the market price of the stock.

---

Definitions:

Intersexuals

People whose medical classification at birth isn’t clearly male or female.

Transvestites

People who cross-dress at times but don’t necessarily consider themselves a member of the opposite sex.

Homosexuals

Individuals who are sexually attracted to people of the same sex.

Transsexuals

People who are born with one biological sex but choose to live their life as another sex.