In this problem we consider whether parity is violated by any of the option prices in Table
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a. Buy the call, sell the put, short the stock, and lend the present value of the strike price plus dividend (where appropriate)?
b. Sell the call, buy the put, buy the stock, and borrow the present value of the strike price plus dividend (where appropriate)? Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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