According to the Put-Call Parity Theorem, the Payoffs Associated with Ownership

question 28

Multiple Choice

According to the put-call parity theorem, the payoffs associated with ownership of a call option can be replicated by ________.

• A) shorting the underlying stock, borrowing the present value of the exercise price, and writing a put on the same underlying stock and with the same exercise price
• B) buying the underlying stock, borrowing the present value of the exercise price, and buying a put on the same underlying stock and with the same exercise price
• C) buying the underlying stock, borrowing the present value of the exercise price, and writing a put on the same underlying stock and with the same exercise price
• D) shorting the underlying stock, lending the present value of the exercise price, and buying a put on the same underlying stock and with the same exercise price

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