Assuming No Dividend Payments and Arbitrage,the Put-Call Parity Formula States

question 5

Multiple Choice

Assuming no dividend payments and arbitrage,the put-call parity formula states that a:

• A)short position in a call and a long position in a put sells for the current share price plus the strike price discounted at the risk-free rate.
• B)short position in a put and a long position in a call sells for the current share price plus the strike price discounted at the risk-free rate.
• C)long position in a call and a short position in a put sells for the current share price less the strike price discounted at the risk-free rate.
• D)long position in a put and a short position in a call sells for the current share price less the strike price discounted at the risk-free rate.

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