Which of the following is true?
A. A long call is the same as a short put
B. A short call is the same as a long put
C. A call on a stock plus a stock is the same as a put
D. None of the above
D
None of the statements are true. Long calls, short calls, long puts, and short puts all have different payoffs as indicated by Figure 10.5 . A put on a stock plus the stock provides a payoff that is similar to a call, as explained in Chapters 11 and 12 . But a call on a stock plus a stock does not provide a similar payoff to a put.
You might also like to view...
What is the customer retention for a company given an average customer life of two years?
A) 40% B) 50% C) 75% D) 80% E) 100%
Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as
A) incentive obstacles. B) information processing obstacles. C) operational obstacles. D) behavioral obstacles.