Derivatives Q116

116Analyst 1: The combination of a long asset, long put, and short the call will result in a risk-free position.
Analyst 2: The combination of a long call, long put, and the short asset will result in a risk-free position.
Which analyst’s statement is most likely correct?

Option : A
Explanation : Put-call parity is given by: long stock + long put = long call + risk-free zero coupon bond. Hence a risk-free zero coupon bond (a risk-free position) can be created as follows: long stock + long put + short call.

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