Answer: long put plus long asset plus short risk-free bond.

## Explanation According to put-call parity for European options, the relationship is: **C + PV(K) = P + S** Where: - C = Price of European call option - P = Price of European put option - S = Current price of the underlying asset - PV(K) = Present value of the strike price (risk-free bond) Rearranging the formula to solve for a long call position: **C = P + S - PV(K)** This means a long call (C) is equivalent to: - **Long put** (P) - **Long asset** (S) - **Short risk-free bond** (-PV(K)) Therefore, option B is correct: **long put plus long asset plus short risk-free bond**. Let's verify the other options: - **Option A**: Long put + long asset + long risk-free bond → This would be C = P + S + PV(K), which is incorrect. - **Option C**: Short put + short asset + long risk-free bond → This would be C = -P - S + PV(K), which is also incorrect. The put-call parity relationship is fundamental in derivatives pricing and ensures that arbitrage opportunities do not exist between European options with the same strike price and expiration date.

Author: LeetQuiz .