A Put and a Call Both Have the Same Maturity

question 43

Multiple Choice

A put and a call both have the same maturity and both have an exercise price which is equal to the current stock price.The interest rate is 5%.Which option should sell for a higher price?

• A) the put.
• B) both should sell for the same price.
• C) the call.
• D) can't say without knowing the variability of the stock.

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Definitions:

Species

A group of living organisms consisting of similar individuals capable of exchanging genes or interbreeding.

Populations

Groups of individuals of the same species living and interbreeding within a given area.

Area

is a measure of the extent of a two-dimensional surface or shape, expressed in square units.

Biosphere

The global ecological system integrating all living beings and their relationships, including their interaction with the elements of the lithosphere, hydrosphere, and atmosphere.