The correct answer is: C. call option + market price
Call parity is a relationship between the price of a call option, the price of the underlying asset, the strike price, and the risk-free interest rate. It states that the price of a call option is equal to the present value of the strike price plus the price of the underlying asset minus the price of a put option with the same strike price and expiration date.
In other words, if you buy a call option, you are essentially buying the right to buy the underlying asset at the strike price on or before the expiration date. The present value of the strike price is the amount of money that you would have to invest today in order to have enough money to buy the underlying asset at the strike price on the expiration date. The price of the underlying asset is the current market price of the asset. The price of a put option is the amount of money that you would have to pay to buy a put option.
If you buy a call option and the price of the underlying asset goes up, the value of your call option will go up. If you buy a call option and the price of the underlying asset goes down, the value of your call option will go down.
Call parity can be used to hedge against losses in the underlying asset. If you own the underlying asset, you can buy a call option to protect yourself against losses if the price of the asset goes down. If you buy a call option, you are essentially buying insurance against losses in the underlying asset.
Call parity can also be used to speculate on the price of the underlying asset. If you believe that the price of the underlying asset is going to go up, you can buy a call option. If you believe that the price of the underlying asset is going to go down, you can sell a call option.
Call parity is a powerful tool that can be used to manage risk or speculate on the price of the underlying asset.