Which of the Following Is True of Options Based on the Put-Call

question 16

Multiple Choice

Which of the following is true of options based on the put-call parity formula?

• A)It pays to exercise an American call option prematurely on an equity that pays no dividends before expiration.
• B)If the underlying equity pays no dividends before expiration,then the no-arbitrage values of American and European call options with the same features will be different.
• C)An investor does not capture the full value of an American call option by exercising between ex-dividend dates.
• D)The no-arbitrage prices of American and European call options are the same irrespective of the dividend payments.

---

Definitions:

Caregiver Strain

The stress and burden experienced by individuals who provide care for family members or others with chronic illnesses or disabilities.

Medical Care

Services provided by health professionals to diagnose, treat, and prevent diseases and injuries, ensuring patient health and wellness.

Weekly Menu Plan

A scheduled outline of meals to be prepared and consumed over a week, aiding in grocery shopping and dietary management.

Respirations

The act of breathing; consists of the inhaling (inspiration) and exhaling (expiration) of air.