A put and a call both have the same maturity and both have an exercise price which is equal to the current stock price.The interest rate is 5%.Which option should sell for a higher price?
A) the put.
B) both should sell for the same price.
C) the call.
D) can't say without knowing the variability of the stock.

Question

Quizplus · Accepted Answer

From put-call parity Price of call = price of stock + price of put − PV(exercise price). If the exercise price = the stock price, price of the call is greater than that of the put.

A Put and a Call Both Have the Same Maturity