The correct answer is: A. present value of option.
Put-call parity is a relationship between the prices of a European call option and European put option, both with the same strike price and expiration date, on the same underlying asset. The relationship states that the difference between the prices of the call option and the put option is equal to the present value of the strike price discounted at the risk-free rate.
In other words, the present value of the option can be calculated by taking the difference between the price of the call option and the price of the put option, and then discounting the result by the risk-free rate.
The put-call parity relationship can be used to hedge against the risk of changes in the price of the underlying asset. For example, if you own a call option, you can hedge against the risk of the price of the underlying asset falling by buying a put option. The put option will provide you with a payoff if the price of the underlying asset falls below the strike price.
The put-call parity relationship can also be used to calculate the fair value of an option. The fair value of an option is the price at which the option should trade in order to ensure that there is no arbitrage opportunity.
The put-call parity relationship is a powerful tool that can be used to hedge against risk and to calculate the fair value of an option.