A Stock Is Currently Selling for $65

question 24

Multiple Choice

A stock is currently selling for $65. There exists both a call option and a put option with a strike price of $65 and the same expiration date. Which of the following is true?

• A) The call price is always greater than the put price.
• B) The put price is always greater than the call price.
• C) The call and the put will have the same price.
• D) The call price will be greater than the put price only if the stock pays a dividend.
• E) None of the above.

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Definitions:

Producers

Organisms, typically plants and algae, that produce organic compounds from simple substances like carbon dioxide, essentially supporting most food chains.

Consumers

Organisms that obtain their energy and nutrients by eating other organisms, cannot produce food themselves and are part of the food chain.

Ecosystem

A biological community interacting with its environment.

Energy Flow

The passage of energy through the components of an ecosystem, from the sun through producers to consumers and then to decomposers.