Put-call parity is defined as the relationship between which of the following variables?
I.risk-free asset
II.underlying stock price
III.call option
IV.put option
A)I and II only
B)II and III only
C)II, III, and IV only
D)I, II, and III only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

Put-call parity is a financial principle that defines the relationship between the price of European put and call options with the same strike price and expiration date, the underlying stock price, and the risk-free rate of return. This means all four variables (risk-free asset, underlying stock price, call option, and put option) are related in this principle.

Put-Call Parity Is Defined as the Relationship Between Which of the Following