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Question: Explain why the put-call parity of European options should hold by drawing the relevant payoff-diagrams and making use of the no arbitrage principle. I
Question: Explain why the put-call parity of European options should hold by drawing the relevant payoff-diagrams and making use of the no arbitrage principle.
I don't understand this question, would really apriciate some clarification on what put call parity is for european options and how to draw a payoff diagram
thanks in advance
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