CFA Practice Question

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CFA Practice Question

Due to their asymmetric payoff profile, options are characterized by no-arbitrage price bounds. The lower bound is a function of the present value of the exercise price and the underlying price, while the upper bound is the ______ for a call and the ______ for a put.

A. underlying price, exercise price
B. exercise price, underlying price
C. exercise price, option price
Correct Answer: A

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