Business, 14.04.2020 22:40, veryrarecobain

You notice a european call and a european put on a stock have the same strike price and time to maturity on an options exchange. At 10:00am on a certain day, the price of the call is $3 and the price of the put is $4. At 10:01am news reaches the market that has no effect on the stock price or interest rates, but decreases the volatility of the stock. As a result, the price of the call changes to $2.50.
1. If put-call parity holds, which of the following is correct?a. The put price increases to $4.50b. The put price decreases to $3.50c. The put price increases to $5.50d. Cannot be determined

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You notice a european call and a european put on a stock have the same strike price and time to matu...