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The Put-Call Parity Formula for Options on a Stock Paying

Question 3

Multiple Choice

The put-call parity formula for options on a stock paying known dividend yields is the same as that for options on a non-dividend-paying stock, except that:


A) S0 is replaced by S0eqT
B) S0 is replaced by S0erT
C) S0 is replaced by S0e−qT
D) S0 is replaced by S0e−rT

Correct Answer:

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