Hi,

I’ve just done a couple of put/call parity questions asking to value a call or put option. No where in the question did it say there was a continuous compounding rate, but the answer used C0 + Xe^(-rt) = P0 + S0

The only thing I can think of for this is because the option was being valued using Black Scholes…so is it that if we are using binomal we use 1/(1+R)^t but if its black scholes then e^(-rt)?