1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Salsk061 [2.6K]
3 years ago
12

Which of the following is true for American options? A. Put-call parity provides an upper and a lower bound for the difference b

etween call and put prices B. Put call parity provides an upper bound but no lower bound for the difference between call and put prices C. Put call parity provides a lower bound but no upper bound for the difference between call and put prices D. There are no put-call parity results
Business
1 answer:
velikii [3]3 years ago
4 0

The statement that holds true for the American Option is (A) Put-call parity provides an upper and lower bound for the difference between call and put prices

Explanation:

According to the Put-call parity concept when we hold the  short European put and long European call of similar class the return delivered is same as  holding one forward contract of the same underlying asset, that has the same expiration, forward price and which is equal to the strike price of the option

In financial management  put–call parity concept is used to define the  relationship that exist  between the price of a European call option and European put option, and both of them have identical strike price and expiry

The formula used for calculating  put call parity is

c + k = f +p

where (c) call price plus the (k) strike price of both options is equal to the futures price(f) plus the put price(p)

You might be interested in
You buy a stock for which you expect to receive an annual dividend of $2.10 for the fifteen years that you plan on holding it. a
kap26 [50]
<span>You are given an annual dividend of $2.10 for the fifteen years that you plan on holding it. Also, after 15 years, you are given to sell the stock for $32.25. You are asked to find the present value of a share for this company if you want a 10% return. You have to mind that the future stock for 15 years is $32.25. You are not only going to mind the present value of the annuity at $2.10 but also the $32.25.

With the interest of r = 10% and number of years of n = 15, we get
PVIFA = 7.6061.

For annuity we have,
$2.10 * 7.60608 = $15.973

For $32.35 with r = 10% and n = 15
PVIF = 0.239392

Thus for the present value of selling price,
$32.25 * 0.239392 = $7.720

Thus the present value of the share
P = $15.973 + $7.720
P = $23.693
</span>
6 0
3 years ago
Patricia is the owner of a floral shop. a successful global candle company approached her about selling its products in her shop
Tema [17]
What could mean above is that the events that is happening to Patricia's life is an opportunity. It is an opportunity for it enables a person to do the things he or she wants with the circumstances that has been given to him or her. It could be described in the scenario above as a global company approach her into selling her products to their shop in which it could make her reach the goal that she has always wanted.
5 0
3 years ago
A firm is producing an output such that the benefit from one more unit is more than the cost of producing that additional unit.
Burka [1]
Losing they're investment dollars. calculating the cost of production.
5 0
3 years ago
____ can be produced independently of the consumer and then stored and shipped.
sergey [27]
The answer is goods :)
8 0
3 years ago
A project manager forgets to assess how national holidays and team member vacations will affect the project’s completion date. N
solong [7]

The flexible strategy is used to avoid the delay in assessing the external constraints.

The following information regarding accessing external constraints:

  • It could be thrust upon an organization.
  • It permits for uncovering the things that are beyond the control.
  • The example involved national holidays or sick leaves.

If we accessing the external constraints so the delay could be avoided.

So, The other options seem incorrect

Therefore we can conclude that the flexible strategy is used to avoid the delay in assessing the external constraints.

Learn more about the external constraints here: brainly.com/question/17156848

5 0
3 years ago
Other questions:
  • The management of a telecommunications company informs the members of its sales team that if they continue to underperform, the
    12·1 answer
  • Manufacturers realize that their clothes might be soiled when people are trying them on in the stores; therefore it's not necess
    7·2 answers
  • What is the difference between a change in aggregate supply and a change in aggregate output supplied?
    10·1 answer
  • When a firm advertises that it only uses recycled paper products it is ________. meeting its legal obligations meeting its socia
    12·1 answer
  • Suppose real GDP is $6,178 billion, taxes collected by the government are $701 billion, government spending is $814 billion, and
    7·1 answer
  • Mega Loan Company has very stringent credit requirements and, accordingly, has negligible losses from uncollectible accounts. Th
    14·1 answer
  • On January 1, 2018, Album Co. issued $200,000 of ten-year bonds. Interest is payable semi-annually on June 30 and December 31. T
    9·1 answer
  • The City of Lawrence opens a solid waste landfill in 2017 that is at 54 percent of capacity on December 31, 2017. The city had i
    5·1 answer
  • BECAUSE BUSINESS CANNOT BE BOOMING APPARENTLY, I MIGHT GET BANNED.
    11·2 answers
  • The major advantage of margin trading is the
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!