Which one of the following statements is correct?

a. Value of put  present value of exercise price  value of call  share price.

b. Value of put  share price  value of call  present value of exercise price.

c. Value of put  share price  present value of exercise price  value of call.

d. Value of put  value of call  share price  present value of exercise price.

The correct statement equates the value of two investment strategies. Plot the payoffs to each strategy as a function of the stock price. Show that the two strategies give identical payoffs.

AppendixLO1