Question

Show that the Black-Scholes-Merton formulas for call and put options satisfy put-call parity. 

   Show that the Black-Scholes-Merton formulas for call and put options satisfy put-call parity.
Options, Futures, and Other Derivatives
Options, Futures, and Other Derivatives
John C. Hull 10th Edition
Chapter 15, Problem 18 ↓

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The Black-Scholes-Merton formula for a call option is given by: C = S * N(d1) - X * e^(-r * T) * N(d2) where: - C is the price of the call option - S is the current price of the underlying asset - N(d1) and N(d2) are the cumulative standard normal  Show more…

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Show that the Black-Scholes-Merton formulas for call and put options satisfy put-call parity.
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