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

Question

Quizplus · Accepted Answer

C represents the value of the call option in the given equation. This equation is a simplified representation of the pricing model for options, where P is the current price of the stock, S is the strike 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 -