Multiple Choice
A European call and a European put on a stock have the same strike price and time to maturity.At 10:00am on a certain day,the price of the call is $3 and the price of the put is $4.At 10:01am news reaches the market that has no effect on the stock price or interest rates,but increases volatilities.As a result the price of the call changes to $4.50.Which of the following is correct?
A) The put price increases to $6.00
B) The put price decreases to $2.00
C) The put price increases to $5.50
D) It is possible that there is no effect on the put price
Correct Answer:

Verified
Correct Answer:
Verified
Q5: A stock price (which pays no dividends)is
Q6: The price of a European call option
Q7: Which of the following can be used
Q8: The price of a European call option
Q9: When volatility increases with all else remaining
Q11: The price of a stock,which pays no
Q12: When dividends increase with all else remaining
Q13: Which of the following is true when
Q14: When the strike price increases with all
Q15: When the stock price increases with all