A Contingent-Pay Option Is Replicated by Which of the Following

question 59

Multiple Choice

A contingent-pay option is replicated by which of the following combinations?

• A)long an ordinary call and long an ordinary put
• B)long an ordinary call and short a cash-or-nothing call
• C)long an ordinary call and short an asset-or-nothing call
• D)long an ordinary call and long an equity forward
• E)long an ordinary call and long a risk-free bond

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Definitions:

Sarcolemma

The cell membrane surrounding a muscle fiber, crucial in muscle contraction and conduction of nerve impulses.

Labeled Structure

A term indicating a diagram or image where specific parts have been marked with labels to identify them.

Acetylcholine

A neurotransmitter in both the central and peripheral nervous systems that is involved in muscle contraction, memory formation, and various other functions.

Axon Terminal

The end of an axon, which makes synaptic connections with another nerve cell or with a muscle or gland cell, allowing for the transmission of electric nerve impulses.