Question
5. AMX Company typically pays dividends to shareholders. Which of the following accurately describes the relation between dividends and the value of options written on
5. AMX Company typically pays dividends to shareholders. Which of the following
accurately describes the relation between dividends and the value of options written on
shares of AMX Company? Assume that AMXs stock has just gone ex-dividend.
(A) Value of a call option is affected negatively and the value of a put option is affected
negatively.
(B) Dividends have no relation with value of options
(C) Value of a call option is affected negatively but the value of a put option is affected
positively
(D) Value of a call option is affected positively and the value of a put option is affected
positively.
(E) Value of a call option is affected positively but the value of a put option is affected
negatively
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Foundations Of Finance
Authors: Arthur J. Keown, John H. Martin, J. William Petty
9th Edition
978-0134083285, 134083288, 978-0134084015
