Which of the Following Is Consistent with Put-Call-Spot Parity

question 28

Multiple Choice

Which of the following is consistent with put-call-spot parity?

• A) S + C = P + X/(1 + RFR)
• B) S + P = C + X/(1 + RFR)
• C) S - C = P + X/(1 + RFR)
• D) S - P = C + X/(1 + RFR)
• E) S = P - C + X/(1 + RFR)

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; used in the CAPM to calculate a stock's expected return.

Coefficient Of Variation

A statistical measure that indicates the relative variability of data points in a data series around the mean, often used to assess the risk of an investment.

Probability Distribution

A statistical function that describes all the possible values and likelihoods that a random variable can take within a given range.

Stock's Expected Return

The anticipated return on a stock, combining both the dividend payments and capital gains, based on historical data and future projections.