CA Final SFM - Option Valuation - Part III - Put Call Parity - Strategic Financial Management
CA Nikhil Jobanputra CA Nikhil Jobanputra
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 Published On Oct 14, 2018

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How would you apply Put-Call Parity Theory in the above example and determine the value of put option?

Solution:
If the outcome of the two different strategies is same then the present value of investment under each of the strategies should also be same.

P + 250 = C + 227.27
P = C + 227.27 – 250
P = C + PV of EP – S0

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