I know from the formula put-call parity is given as
C-P= So -Xe^-rt
so clearly if there is a violation of parity an arbitrage opportunity exists. But does that mean that put-call parity is not present?
I know from the formula put-call parity is given as
C-P= So -Xe^-rt
so clearly if there is a violation of parity an arbitrage opportunity exists. But does that mean that put-call parity is not present?
Yes: if there is an arbitrage opportunity, put-call parity is not present.