The greater the dividend paid by stock

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Reference no: EM131939912

1. All else being equal, the greater the dividend paid by a stock the:

A. lower the call price and the higher the put price.

B. both the call price and the put price will be higher.

C. both the call price and the put price will be lower.

D. higher the call price and the lower the put price.

2. Two call options that are only different in strike prices have option premiums of $1.50 and $2.00 for strikes of $40 and $30, respectively. Using strike price convexity, which option premium is possible for a call option with $35 strike of the same maturity?

A. 1.80

B. 1.75

C. 1.70

D. 1.85

Reference no: EM131939912

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