An investor observes c0 = 10, S0 = 200, PV(X) = 190. Using put–call parity, what is the no-arbitrage put price p0?
Explanation
Compute p0 with p0 = c0 + PV(X) - S0; substitution gives 0. Parity can imply zero premium when call and underlying/bond values align.
Other questions
If S0 = 120, c0 = 6, PV(X) = 110, what is the put price p0 implied by put–call parity?
A covered call consists of holding the stock and selling a call. Using put–call parity, which portfolio is equivalent to a covered call (S0 - c0)?
Which of the following identities is a correct rearrangement of put–call parity S0 + p0 = c0 + PV(X)?
A six-month European call has price 12, the underlying spot is 140, PV(X) = 130. What action yields arbitrage if observed put price is 5?
In put–call forward parity, which expression correctly links forward price F0(T), put p0, call c0, and PV(X)?
If F0(T) = 210 and PV(X) = 200 and c0 = 15, what is implied p0 from put–call forward parity (assume discounting accounted in PV)?
A six-month call with strike 100 is trading at 7, S0 = 95, PV(X) = 97. Using put–call parity, what is the price of the put p0?
Which of the following is a correct interpretation of a fiduciary call?
If put–call parity does not hold in markets, what is the immediate implication under textbook assumptions?
A six-month forward on a stock has forward price F0(T) = 102 and PV(F0(T)) = 100. An at-the-money call (strike 100) costs c0 = 4. Using put–call forward parity, what is p0 if PV(X) = 100?
A protective put (long stock S0 + long put p0) and a fiduciary call (long call c0 + long bond PV(X)) have identical payoffs. Which assumption is essential for that equality in the chapter?
You observe S0 = 80, c0 = 3, PV(X) = 78. If a put trades at p0 = 6, is there an arbitrage? If so, which side is overpriced?
A trader wants to synthetically create a long underlying position using options and bonds per parity. Which portfolio replicates S0?
A six-month call is 9, the corresponding put is 4, PV(X) = 100. What is the implied spot S0 by parity?
A trader sees a put price higher than parity-implied p0. Which arbitrage action is consistent with the chapter?
How does put–call parity help determine missing option premium when only call is quoted and underlying and PV(X) known?
Which portfolio equivalence illustrates that a debtholder position is like a risk-free bond minus a put on firm value?
If a firm has asset value V0, debt face value D, and put price on firm value p0, what formula links these per the chapter?
Which of the following best describes the synthetic protective put introduced in the chapter?
If parity implies p0 = 25 and market put sells for 30, which of these steps yields arbitrage profit under textbook assumptions?
Which of the following is a correct economic interpretation from the chapter: equity holders in a levered firm resemble which options position?
A firm has debt D = 100 and PV(D) = 90, observed put on firm value p0 = 12, what call c0 does parity imply for firm assets valued at V0 = 50?
Which of the following best describes a covered call strategy payoff at expiration?
Which algebraic relationship shows that a put can be replicated using a call, a bond, and short underlying as given in the chapter?
A trader uses put–call forward parity to relate forward and option prices. If F0(T) > X, what sign does p0 - c0 have according to equation p0 - c0 = [X - F0(T)](1 + r)^{-T}?
Which of these steps correctly describes creating a fiduciary call at inception per the chapter?
Suppose S0 + p0 < c0 + PV(X). According to the chapter, what arbitrage action should be taken?
A call and put share identical strike and maturity. Which combination yields a synthetic forward position according to parity concepts in the chapter?
A market shows c0 = 2, p0 = 1, S0 = 50, PV(X) = 52. Is parity satisfied and what is the implication?
Which of these is a direct consequence of put–call parity for option market makers?
A European call with X = 100 trades at 12 and the put at same X trades at 9. If S0 = 95, what is PV(X) implied by parity?
In the chapter example, what is the covered call implicit call price if S0 = 295, PV(X) = 259.85, and put p0 = 56?
Which statement correctly links credit spreads and put prices as explained in the chapter?
A trader wants to create a synthetic long forward using options and bonds at t = 0. Which combination from parity will achieve this?
Which of the following is a correct step when executing a parity arbitrage in practice as given in chapter examples?
Which of the following numerical examples from the chapter demonstrates computing a missing put when c0 = 59, S0 = 295 and PV(X) = 259.85?
Which practical limitation does the chapter acknowledge may prevent pure parity arbitrage in real markets?
A trader uses parity to check consistency between option and forward markets. If parity suggests p0 - c0 = -2 and observed p0 - c0 = 1, what does chapter recommend?
Which of the following transformations illustrates that selling a put and buying a call equals short underlying plus long PV(X) per chapter algebra?
Which of the following example outcomes in the chapter illustrates the numerical arbitrage profit when parity is violated?
Why does put–call parity require European options in the chapter's basic form?
Which equation from the chapter expresses the protective put payoff at expiry equals fiduciary call payoff?
A practitioner wants to price a covered call using a traded put and PV(X). If p0 = 12 and PV(X) = 110 and S0 = 130, what is call price c0 implied by parity-algebra used in chapter?
Which parity-based identity supports the statement that shareholders have limited downside and unlimited upside relative to debtholders?
Which of the following numerical tests would confirm put–call forward parity consistency in market quotes as per chapter procedure?
In practice, why might put–call parity be used by traders beyond finding arbitrage, according to chapter discussion?