____________is the relationship between the price of a call option and a put option.
A)The binomial option pricing model
B)The Black-Scholes option pricing model
C)Put-call parity
D)A swap

Question

Quizplus · Accepted Answer

Put-call parity is the relationship between the price of a call option and a put option, where the price of a European call option plus the present value of the strike price equals the price of a European put option plus the current stock price. This parity relationship holds in efficient markets and can be used to verify the pricing of options. The other choices, such as the binomial and Black-Scholes option pricing models, are methods for determining the fair value of options, while a swap is a type of financial derivative that involves exchanging cash flows.

____________Is the Relationship Between the Price of a Call Option