Question: A foreign currency put option is equivalent to a position in the foreign currency T-bill and a certain amount of borrowing/lending of the home currency.

A foreign currency put option is equivalent to a position in the foreign currency T-bill and a certain amount of borrowing/lending of the home currency. Is your replicating position in the foreign currency T-bill long or short? Why? Do you borrow or lend the home currency? Why?

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