Question: Answer the following questions on exotic options: ( a ) Discuss the differences between a combination and a spread when constructing portfolios of options. (
Answer the following questions on exotic options:
a Discuss the differences between a combination and a spread
when constructing portfolios of options.
b Define a long strangle and represent the profit function.
c Design a forward contract on a stock with a particular delivery
price and delivery date as a combination of options on the same
underlying asset.
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