The Law of One Price Requires That ________ Must Have

question 42

Multiple Choice

The Law of One Price requires that ________ must have the same price.

• A) the stock and a put or a bond and a call
• B) the stock and a call or a bond and a put
• C) the bond and a put or a stock and a put
• D) the bond and a call or a stock and a call

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Definitions:

Debt-Equity Ratio

A financial comparison indicating the relationship of debt to equity in financing a company’s assets.

WACC

A calculation of a firm's cost of capital in which each category of capital is proportionately weighted, used to evaluate investment opportunities.

Flotation Costs

Flotation costs are the total costs incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.