Write the Basic Mathematical Formula for Put-Call Parity (Using P, C, S, K, T, R) ▴ Learn

Write the Basic Mathematical Formula for Put-Call Parity (Using P, C, S, K, T, R).

The basic mathematical formula for put-call parity is: C + PV(K) = P + S. Where C is the price of the European call option, P is the price of the European put option, S is the current spot price of the underlying asset, and PV(K) is the present value of the strike price K, discounted from the expiration time T at the risk-free rate r. The formula is often written as C – P = S – K e^(-rT).

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