The Position diagram for a put with the same exercise price and premium as the call on the same underlying asset with the same maturity is (like):
A) the inverse of the call diagram along the put price
B) unrelated to the call diagram no matter what the exercise price
C) the mirror image of the call diagram around the exercise price
D) exactly the same as the call diagram for the given exercise price

Question

Quizplus · Accepted Answer

The position diagram for a put with the same exercise price and premium as the call on the same underlying asset with the same maturity is the mirror image of the call diagram around the exercise price. This is because a put gives the holder the right to sell the underlying asset at the exercise price, while a call gives the holder the right to buy the underlying asset at the exercise price. As a result, their payoffs are mirror images of each other.

The Position Diagram for a Put with the Same Exercise