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Which one of the following statements is correct? a. Value of put + present value of exercise price = value of call + share price

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.

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