FoundationMultiple choice
Rates are zero and a stock pays no dividend. How does an at-the-money European call compare with the put of the same strike and expiry?
- AThe call is worth more
- BThey are worth the same
- CThe put is worth more
- DIt depends on the volatility
The worked solution is in Premium
The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.
Learn the method
Reported in interviews at
More options: fundamentals and arbitrage questions
- You buy a call and sell a put with the same strike and expiry.Foundation
- Parity with a dividend in the way, part 1 of 3Foundation
- A stock trades at $100 with no dividends.Applied
- A stock is at $100 with no dividends.Applied
- Rates are zero. A stock at $100 will pay a $3 dividend before expiry.Applied
- A one-year European box spread with strikes $100 and $120 trades at $19.20.Applied