Consider a stock that pays no dividends whose value equals the strike price of a call and put with identical contract terms on the stock.Interest rates are positive.Then,which of the following is true?

Question

Quizplus · Accepted Answer

When the stock price equals the strike price, and interest rates are positive, the call option is generally more valuable than the put option due to the time value of money. Investors are willing to pay more for the potential upside (call option) since they can invest the strike price at the positive interest rate until the option's expiration.

Consider a Stock That Pays No Dividends Whose Value Equals