An Important Assumption of Put-Call Parity Is That

question 18

Multiple Choice

An important assumption of put-call parity is that

• A) both options may have different exercise prices but the same expiration dates
• B) both options have the same exercise prices and the same expiration dates
• C) both options will produce the same payoff on the stock as well as a risky bond
• D) both options will produce the same payoff on the stock as well as another risky asset.

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Definitions:

Assumption of State Debts

A policy proposal by Alexander Hamilton in the late 18th century, advocating that the federal government assume debts incurred by the states during the American Revolutionary War.

Alexander Hamilton

A Founding Father of the United States, chief staff aide to General George Washington, and the first Secretary of the Treasury.

Opposition in Congress

Instances or movements within the United States Congress where members challenge, resist, or impede policies, legislation, or leadership.

Slave Population

Refers to the people who were forcibly taken from Africa and other regions to work without wages, primarily in the Americas.