Question: For each entry in Table 2.5, explain the circumstances in which the maximum gain or loss occurs. In table 2.5 Maximum Loss Position Long forward

For each entry in Table 2.5, explain the circumstances in which the maximum gain or loss occurs.
In table 2.5

Maximum Loss Position Long forward Short forward Long call Short call Long put Short put Forward price FV(premium) FV (premium) Maximum Gain Unlimited Forward price Unlimited FV(premium) Strike price FV(premium) Unlimited Unlimited FV(premium)- Strike price FV(premium)

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a Long Forward The maximum loss occurs if the stock price at expiration is zero the stock price cannot be less than zero because companies have limite... View full answer

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