For European Options, the Value of a Call Minus the Value

question 43

Multiple Choice

For European options, the value of a call minus the value of a put is equal to

• A)the present value of the exercise price minus the value of a share.
• B)the present value of the exercise price plus the value of a share.
• C)the value of a share plus the present value of the exercise price.
• D)the value of a share minus the present value of the exercise price.

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Definitions:

Chart of Accounts

A structured list of all the financial accounts in the general ledger of a company, organizing financial transactions during an accounting period.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the correct period.

Insurance Premium

The amount paid for an insurance policy, typically charged monthly or annually, for the duration of the policy.

Note Payable

A written promise to pay a specific amount of money, either on demand or at a set future date, typically evidenced by a formal legal document.