Which of the following is consistent with put-call-spot parity?
A) S + C = P + X/(1 + RFR)
B) S + P = C + X/(1 + RFR)
C) S - C = P + X/(1 + RFR)
D) S - P = C + X/(1 + RFR)
E) S = P - C + X/(1 + RFR)

Question

Quizplus · Accepted Answer

Put-call-spot parity states that the sum of the present value of a call option and the present value of the spot price is equal to the sum of the present value of a put option and the present value of the strike price discounted at the risk-free rate. Therefore, S+P=C+X/(1+RFR) is the correct formula, as it follows this principle.

Which of the Following Is Consistent with Put-Call-Spot Parity