9. Put-call parity and the value of a put option Aa Aa D Consider two portfolios A and B. At the expiration date, t, both portfolios have identical payoffs. Portfolio A consists of a put option and one share of stock. Portfolio B has a call option (with the same strike price and expiration date as the put option) and cash in the amount equal to the present value (PV) of the strike price discounted at the continuously compounded risk-free rate, which is Xe TRR. At expiration, the stock price is P, and the value of this cash will equal the strike price, X. Let V stand for the value of the call option as defined in the Black-Scholes model. Complete the equation for the value of a put option: Put Option - D O Now consider the stock of Kitsch Enterprises (KE) traded at the price P - $40. A put option written on KE's stock has an exercise price of X $35 and 6 months remaining until expiration. The risk-free rate is = 8%. A call option written on KE has the same exercise price and expiration date as the put option. If the call option has a price of Vc = $7.39, then the price of the put option is . (Note: Use 2.7183 as the approximate value of e.)