Question: 1. When the underlying asset pays a continuous dividend at rate q, the prices of a European call and a European put are given by:

1. When the underlying asset pays a continuous dividend at rate q, the prices of a European call and a European put are given by: C(S, t) = e-q(T-t) SN(dig) - er(1-t) EN(d2q) , P(S, t) = er(T-t) EN(-d2q) - e-4(1-t) SN(-dig) , In (S/ E) +( r - q+502)(T -t) where diq = d2q = diq - OVT -t. OVT -t Derive put-call parity for these European options. That is, compute C(S, t) - P(S, t) and simplify the result. (Using N(-x) = 1 - N(x) may be helpful.)

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