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What does put-call parity relate?

  1. A The prices of European calls, puts, the underlying and a risk-free bond
  2. B Only calls and the underlying
  3. C Options and futures only
  4. D Bonds and equities
Answer

The prices of European calls, puts, the underlying and a risk-free bond

Any deviation from parity implies an arbitrage opportunity, which is why the relationship holds closely in liquid markets.

All CFA MCQs

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