n NISM Certifications
VIII NISM Series VIII
Medium

The 'put-call parity' relationship links the prices of a call and a put with the same strike and expiry, assuming the absence of arbitrage. It is expressed as _______.

Practice question from NISM Series VIII - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Call price + Present value of strike = Put price + Spot price

  2. Call price - Put price = Spot price - Present value of strike

    Correct answer

  3. C

    Call price × Put price = Spot price × Present value of strike

  4. D

    Call price / Put price = Spot price / Present value of strike

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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