Business / Finance / Put-Call Parity Relationship: The relationship between the price of a put and the price of a call on the same underlying security with the same expiration date, which prevents arbitrage opportunities. Holding the underlying stock and buying a put will deliver the exact payoff as buying one call and investing the present value (PV) of the exercise price. The call value equals C = S + P - PV(k).
Parity Noun Synonyms: equality, equivalence, consistency, uniformity, par, likeness, similarity, analogy, congruity, similitude, conformity, congruence
Business / Finance / Principal-Agent Relationship: Occurs when one person, an agent, acts on the behalf of another person, the principal. MORE
Business / Finance / Purchasing Power Parity: The notion that the ratio between domestic and foreign price levels should equal the equilibrium exchange rate between domestic and foreign currencies. MORE