CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

A description least likely to explain put-call parity is ______.

A. a fiduciary call option strategy and a protective put option strategy for an underlying asset are equal in value
B. a put is equivalent to a long call, a long position in the underlying asset, and a long position in the risk-free asset
C. a call is equivalent to a long put, a long position in the underlying asset, and a short position in the risk-free asset
Correct Answer: B

The put requires a short position in the underlying rather than a long position.

User Contributed Comments 1

User Comment
khalifa92 + = Long
- = Short
You need to log in first to add your comment.