Question: 5. a. How does one synthetically create a short sold stock position using buying/selling the call, buying/selling the put, and borrowing/lending? b. Now how does

5. a. How does one synthetically create a short sold stock position using buying/selling the call, buying/selling the put, and borrowing/lending?

b. Now how does one synthetically create lending, with buying/selling the call, buying/selling the put, and buying/selling the stock?

c. If the call is trading at 6.0, and the put is trading at 3, and the stock is trading at 100, how can we make arbitrage if B=.98 and the strikes for both the call and the call are 100.

the put are 100? In particular what do we buy or sell in the market and what do we buy or sell synthetically and specifically how do we construct this synthetic creation? How much money do we make?

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