Consider the following equation: C = P + S - PV(K)- PV(Div)
In this equation,what does the term S represent?
A)the payoff of a zero-coupon bond
B)the strike price of the option
C)the value of the call option
D)the stock's current price
E)the value of the put option

Question

Quizplus · Accepted Answer

The term S in the equation represents the stock's current price. This equation is used in financial models to calculate the value of a call option, where C is the call option value, P is the put option value, S is the current stock price, PV(K) is the present value of the strike price, and PV(Div) is the present value of dividends.

Consider the Following Equation: C = P + S -