Explain the 'Put-Call Parity' Theorem ▴ Learn

Explain the ‘Put-Call Parity’ Theorem.

Put-Call Parity is a principle in financial engineering that defines the relationship between the price of a European Call option and a European Put option with the same strike price and expiration date, written on the same underlying asset. It states that the value of a portfolio consisting of a Call and cash should equal the value of a portfolio consisting of a Put and the underlying asset.

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