标题: Doubt - Derivatives [打印本页]

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作者: w1977    时间: 2011-7-11 18:33     标题: Doubt - Derivatives

The put-call parity relation can be adjusted for dividend payments on a stock by which of the following methods?

A) Add the present value of the expected dividend payments to the exercise price.

B) Add the present value of the expected dividend payments to the current stock price.

C) Subtract the present value of the expected dividend payments from the current stock price.


Solution: C. The correct adjustment is to subtract the present value of the expected dividend payments from the current stock price.


Can someone please explain this concept

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作者: waldziuchna    时间: 2011-7-11 18:33

Options prices do not adjust for stock dividends.

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CFA Jay, CFA

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作者: scr879    时间: 2011-7-11 18:33

Thanks mihau !!!

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