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Why does the put-call parity relationship only come close to holding, but not predict the exact price? A.In practice, excessive amounts of arbitrage weakens the
Why does the put-call parity relationship only come close to holding, but not predict the exact price?
A.In practice, excessive amounts of arbitrage weakens the strength of the relationship.
B.European-style options add complexities not present in American-style options.
C.Transaction costs cause the prices to be slightly different from the prediction.
D.The put-call parity relationship is a theoretical finding which cannot be expected to hold in practice.
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