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According to the Put-Call Parity Theorem, the Payoffs Associated with Ownership

Question 57

Multiple Choice

According to the put-call parity theorem, the payoffs associated with ownership of a call option can be replicated by ________.


A) shorting the underlying share, borrowing the present value of the exercise price and writing a put on the same underlying share and with the same exercise price
B) buying the underlying share, borrowing the present value of the exercise price and buying a put on the same underlying share and with the same exercise price
C) buying the underlying share, borrowing the present value of the exercise price and writing a put on the same underlying share and with the same exercise price
D) shorting the underlying share, lending the present value of the exercise price and buying a put on the same underlying share and with the same exercise price

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