The value of a bond is given by
I.bond value = asset value - value of call option on assets
II.bond value = value of an equivalent default-free bond + value of put option on assets
III.bond value = value of an equivalent default-free bond + value of put option on the stock
IV.bond value = asset value + value of call option on the stock
A) I only.
B) I and II only.
C) III and IV only.
D) IV only.
Correct Answer:
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