Question: Could more than one correct answer 1. To create a synthetic stock using options, one needs to a) Long a put, short a call, and

Could more than one correct answer

1. To create a synthetic stock using options, one needs to a) Long a put, short a call, and buy a bond b) Long a call, buy a bond, and short a put c) Long a call, short a put, and sell a bond d) Long a put, long a call, and sell a bond

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Company A is a global company based in the United States that operates in the financial industry Company A serves its customers with financial products such as checking accounts bank cards and...

Incorrect Question 1 0/1 pts 1. To create a synthetic stock using options, one needs to Long a put, short a call, and buy a bond Long a call, buy a bond, and short a put Long a call, short a put, and...

Could more than one correct answer 2. To create a synthetic riskless bond using options and stocks, one needs to a) Short a stock, short a call, and short a put b) Short a stock, short a call, and...

Portfolio Margin Test: Each question below is followed by two or more answer choices. After carefully reading each question, select your response by placing a check mark next to the answer you...

The current price of a share of stock of ABC, Inc is 100. The stock does not pay dividends. A one-year call option with a strike price of 104.08 costs 5.00. The continuously compounded risk-free rate...

Please answer the whole thing, thank you for helping. The current price of a share of stock of ABC, Inc is 100 . The stock does not pay dividends. A one-year call option with a strike price of 104.08...

Bill jones Inherited 5.000 shares of stock priced at $45 per share He does not want to seil the stock this year due to tax reasons, but he is concerned that the stock will drop in value before year...

DO NOT ANSWER THE SAME ANSWER GIVEN ALREADY. GIVE YOUR OWN ANSWER OR STAY AWAY FROM THE QUESTION!! 6. Assume that you will have 1 Barrel of oil (you are a finance manager at BP which sells oil), one...

Portfolio Margin Test: Each question below is followed by two or more answer choices. After carefully reading each question, select your response by placing a check mark next to the answer you...

You are the manager of a silver mine, and want to sell your silver two months from now. To manage your price risk using options, you sell a put. Group of answer choices True False A large absolute...

Hi, please i just need answers for question 2 1. Draw the payoff diagrams below labeling the axis with the correct profit or loss amounts. a. Purchase of Microsoft common stock or take long stock...

A sealed vessel contains a mixture of 956 g of trichloromethane CHCl 3 also called chloroform and 230g of ethanol CH 3 CH 2 OH. At 30-degree Celcius assume that their vapor pressures are 36.0 kpa and...

Colin is 3 5 years old and inherits a Traditional IRA from his mother, who dies prematurely at age 6 0 in May 2 0 2 3 . Which of the following statements is correct regarding his options for the...

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...