A Synthetic Long Call Position Can Be Created with Which

question 41

Multiple Choice

A synthetic long call position can be created with which of the following sets of transactions.

• A)borrow the present value of the strike price,sell stock,sell put
• B)lend the present value of the strike price,sell stock,buy put
• C)sell put,buy stock,lend the present value of the strike price
• D)buy stock,buy put,borrow the present value of the strike price
• E)none of the above creates a synthetic long call position

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Definitions:

Leased Assets

Items of property or equipment that a company or individual rents under a lease agreement, rather than owns outright.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business.

Operating Activities

Activities that relate to the day-to-day functions of a company involved in producing and selling its goods and services.

Cash Flow From Financing

This represents the net flows of cash that are used to fund a company, including debt, equity, and dividend payments.