From the Law of One Price,the value of any security is determined by ________ an investor receives from owning it.Therefore,before we can assess what an option is worth,we must determine an option's ________ at the time of expiration.

Question

Quizplus · Accepted Answer

The Law of One Price states that the value of any security is determined by the future cash flows an investor receives from owning it. Therefore, before we can assess what an option is worth, we must determine an option's payoff at the time of expiration. Choice D correctly matches these concepts.

From the Law of One Price,the Value of Any Security