explain in detail, please

. Examples: Put-Call Parity Price of a non-dividend paying stock: $40, r = 8% option strike price: $40, time to expiration: 3 months, European call: $2.78. Parity for options on non-dividend paying stock is C-P=S. -e "K European put: $2.78 - $40 + $40e-008025 = $1.99 What if the stock pays $5 just before expiration, instead of paying no dividend? 7.172 tike forward Contract (r-ST. F = Sue Examples: Put-Call Parity dividend If the stock pays $5 just before expiration, call: $0.74, and put: $4.85. Take out preser C-P=S-e-TD-e-7K Value of divide 0.74 - 4.85 = 40 - 50.08x0.25 - 40 e 0.08x0.25 Because of dividend payment, call sells for less and put sells for more. (The value of stock is reduced by dividend payment.) when shere priced put of practise rede