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Put-call parity for European options on a non-dividend stock states:
AC − P = S − K · e^{−rT}
BC + P = S + K
CC · P = S · K
DC − P = K · e^{−rT} − S
Answer & Solution
Correct answer: A. C − P = S − K · e^{−rT}
1. Identify what the question asks: this concept maps to putcallparity (§7.3).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (A).
_Source: ICAI BoS CA Final Paper 2, Ch 9 "Derivatives Analysis and Valuation"_
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