Which of the following is true? Group of answer choices For American options, the put-call parity...

Which of the following is true?

Group of answer choices

For American options, the put-call parity result provides a lower bound but no upper bound for the difference between call and put prices.

For American options, the put-call parity result provides an upper bound but no lower bound for the difference between call and put prices.

For American options, the put-call parity result provides an upper bound and a lower bound for the difference between call and put prices.

Cash dividends are ignored in the put-call parity results for both European and American options because they do not affect option value.

Expert Solution

ANSWER

C)

For American options, the put-call parity result provides an upper bound and a lower bound for the difference between call and put prices.

jeff jeffy answered 2 years ago

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