Put-Call Parity Is Valid for

question 12

Multiple Choice

Put-call parity is valid for

• A) Stock returns that are normally distributed, that is, stock movements are symmetric, but not otherwise.
• B) American calls and puts when the stock pays no dividends.
• C) European calls and puts when the stock pays dividends.
• D) Stocks but not for currencies.

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Definitions:

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing stocks, paying dividends, and borrowing loans.

Statement Of Cash Flows

A financial report that details the inflows and outflows of cash within a company over a specific period, indicating its operational, investing, and financing activities.

Financing Activities

Transactions and events affecting the long-term liabilities and equity of a company, including issuing debt, repaying loans, and distributing dividends.

Net Cash

The amount of cash that is remaining after all cash inflows and outflows have been accounted for, over a specific period.