According to put-call parity,if a stock is overvalued,the investor should sell the stock short,sell the put,buy the call,and buy the bond.

Question

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Put-call parity states that the value of a stock plus the value of a put option minus the value of a call option equals the value of a bond with the same maturity. If a stock is overvalued, then the value of the stock is greater than the value of the bond. This means that the value of the put option must be less than the value of the call option. Therefore, an investor can profit by selling the stock short, selling the put, buying the call, and buying the bond.

According to Put-Call Parity,if a Stock Is Overvalued,the Investor Should