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Buying the Stock and the Put Option on the Stock

Question 7

Multiple Choice

Buying the stock and the put option on the stock provides the same payoff as


A) investing the present value of the exercise price in T-bills and buying the call option on the stock.
B) short-selling the stock and buying a call option on the stock.
C) writing (selling) a put option and buying a call option on the stock.
D) a T-bill.

Correct Answer:

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