The relationship between the market price of a put and a call that have the same exercise price, expiration date, and underlying stock is known as _____ parity.
A) forward rate
B) buy-sell
C) interest rate
D) put-call

Question

Quizplus · Accepted Answer

Put-call parity is the relationship between the market price of a put and a call that have the same exercise price, expiration date, and underlying stock. Therefore, the correct answer is D, put-call parity. The other options (A) forward rate, (B) buy-sell, and (C) interest rate do not relate to this particular concept.

The Relationship Between the Market Price of a Put and a Call