Hi everyone,

I’m having trouble understanding this question from the Schweser notes:

A synthetic European put option is created by:

A. buying the discount bond, buying the call option, and short-selling the stock

B. buying the call option, short-selling the discount bond, and short-selling the stock

C. short-selling the stock, buying the discount bond, and selling the call option

The book lists A as the correct answer, but even after reading the explanation I don’t understand why. What’s the simplest way to approach this type of question?

Thanks!