The correct answer is: A. exercise price present value.
Call parity is a relationship between the prices of a call option, a put option, and the underlying stock. It states that the price of a call option is equal to the price of a put option plus the present value of the strike price minus the price of the stock.
The put option minus the call option is equal to the present value of the strike price. This is because the put option gives the holder the right to sell the stock at the strike price, while the call option gives the holder the right to buy the stock at the strike price. If the stock price is below the strike price, then the put option will be exercised and the holder will sell the stock at the strike price. This means that the put option is worth at least the present value of the strike price.
The stock is equal to the present value of the future cash flows from the stock. This is because the stock represents ownership of a company, and the company will generate cash flows in the future. These cash flows can be discounted to their present value to get the value of the stock.
Therefore, the put option minus the call option in addition with stock is equal to the exercise price present value.