Buying a Stock and a Put Option, and Lending the Present

question 24

True/False

Buying a stock and a put option, and lending the present value of the exercise price provide the same payoff as buying a call option.

---

Definitions:

Foreign Bonds

Bonds issued in a domestic market by a foreign entity, denominated in the domestic market's currency as a form of investment.

United States

A country in North America, consisting of 50 states, known for its significant economic and political influence globally.

Currency

A system of money in general use in a particular country or economic context.

Floating Rate System

A currency exchange system where the value of a currency is allowed to fluctuate according to the foreign exchange market.