15. You can realize the same value as that derived from stock ownership if you:

Question

15. You can realize the same value as that derived from stock ownership if you: a. sell a put option and invest at the risk-free rate of returrn. b, buy a call option and write a put option on a stock and also lend out funds at the risk-free rate. c. sell a put and buy a call on a stock as well as invest at the risk-free rate of return. d. lend out funds at the risk-free rate of return and sell a put option on the stock. e. borrow funds at the risk-free rate of return and invest the proceeds in equivalent amounts of put and call options.

Explanation / Answer

as per put call parity stock ownership can be replicated by buying a call, selling a put and holding cash. So option c.

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