Put-Call Parity Allows a Discussion of Option Pricing Relationships Without

question 16

Essay

Put-call parity allows a discussion of option pricing relationships without actually pricing an option.Have the class list all the possible pricing relationships they can recall.Add to the list until reasonably complete.Follow up this exercise by listing puts and calls,while asking students to state if certain premiums are possible.

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Definitions:

Business Report

A formal document that presents analysis, research, or information on business-related subjects, aimed at supporting decision-making processes.

Mandatory

Required by law or rules; obligatory.

Independent Clause

A group of words that can stand alone as a complete sentence because it has both a subject and a verb and expresses a complete thought.

Dependent Clause

A group of words that contains a subject and verb but does not express a complete thought and cannot stand alone as a sentence.