You Can Realize the Same Value as That Derived from Share

question 4

Multiple Choice

You can realize the same value as that derived from share ownership if you:

• A)sell a put option and invest at the risk-free rate of return.
• B)buy a call option and write a put option on a share and also lend out funds at the risk-free rate.
• C)sell a put and buy a call on a share as well as invest at the risk-free rate of return.
• D)lend out funds at the risk-free rate of return and sell a put option on the share.
• E)borrow funds at the risk-free rate of return and invest the proceeds in equivalent amounts of put and call options.

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Definitions:

Factor Analysis

A statistical method used to identify underlying variables, or factors, that explain the pattern of correlations within a set of observed variables.

Total Compensation System

The complete package of financial and non-financial benefits provided to employees, including salaries, bonuses, health insurance, and retirement plans.

Organizational Environment

The sum of internal and external factors that affect an organization's operation, including economic, technological, social, and political influences.

Pay Grade

A defined level within an organization's pay structure that determines the amount of compensation an employee receives.