Consider the payoff structures of the following two portfolios a Buying a one month call option on one share of stock at a strike price of $50 and saving the present value of $50 (so that at expiration it will have grown to $50 with interest) b Buying a one month put option on one share of stock at...

The payoff of these two portfolios is identical In the first case if the stock price is below 50 a ...

Consider the payoff structures of the following two portfolios: a. Buying a one month call option on

Question:

Consider the payoff structures of the following two portfolios:
a. Buying a one month call option on one share of stock at a of $50 and saving the present value of $50 (so that at expiration it will have grown to $50 with interest).
b. Buying a one month put option on one share of stock at a of $50 and buying one share of stock.
What conclusion can you draw about the relation between call prices and put prices from a comparison of these two portfolios?

Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.