Answer: equal to the price of at-the-money call option.

## Explanation According to put-call parity, the relationship between call and put options with the same strike price and expiration date is: **Put-Call Parity Formula:** \[ C + PV(K) = P + S \] Where: - \( C \) = Price of call option - \( P \) = Price of put option - \( S \) = Current stock price (spot price) - \( PV(K) \) = Present value of strike price \( K \) - \( K \) = Strike price For an **at-the-money** option, the strike price \( K \) equals the current stock price \( S \). When the forward price equals the spot price, this implies that the risk-free rate is zero (or the time to expiration is zero). In this case: \[ PV(K) = K \times e^{-rT} = S \times e^{-rT} \] If forward price = spot price, then: \[ F = S \times e^{rT} = S \] \[ e^{rT} = 1 \] \[ rT = 0 \] This means either \( r = 0 \) or \( T = 0 \). In either case, \( PV(K) = K = S \). Substituting into put-call parity: \[ C + S = P + S \] \[ C = P \] Therefore, the price of an at-the-money put option will be **equal to** the price of an at-the-money call option. **Key Insight:** When the forward price equals the spot price, the present value factor is 1, making the present value of the strike price equal to the current stock price. This causes the put and call prices to be equal under put-call parity for at-the-money options.

Author: LeetQuiz .