Multiple Choice
If the price of a call option in the market is higher than that derived from the Black-Scholes option pricing model, an investor could:
A) Sell the call option and buy a certain number of shares in the underlying stock.
B) Buy the call option and buy a certain number of shares in the underlying stock.
C) Buy the call option and sell short a certain number of shares in the underlying stock.
D) Sell the call option and sell short a certain number of shares in the underlying stock
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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