Consider Both a European Put and Call That Expire in June

question 96

Multiple Choice

Consider both a European put and call that expire in June and have a strike price of $30.The no-arbitrage relationship between this put and call is referred to as which one of the following?

• A)intrinsic equilibrium
• B)Euro-match
• C)bull-call spread
• D)butterfly spread
• E)put-call parity

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Definitions:

Anion

Ion carrying a negative charge.

Positively Charged

Having more protons than electrons, resulting in a net positive electric charge.

Negatively Charged

Refers to atoms or molecules that have gained one or more electrons, resulting in a net negative charge.

Molecule

The smallest physical unit of an element or compound, consisting of one or more atoms held together by chemical forces.