The put-call parity theorem relates the prices of put and call options. If the relationship is violated, arbitrage opportunities will result. Specifically, the parity relationship states that P0 = C0 − S0 + PV(X) + PV(dividends) P-639 where X is the exercise price of both the call and the put options, PV(X) is the present value of a claim to X dollars to be paid at the expiration date of the options, and PV(dividends) is the present value of dividends to be paid before option expiration.