Question: Question9 Suppose that a trader with perfect timing ability makes one trading decision invest 100% in either the market portfolio or the risk-free asset at

Question9

Suppose that a trader with perfect timing ability makes one trading decision invest 100% in either the market portfolio or the risk-free asset at the beginning of each period. The one-period payoff pattern that the trader would generate is equivalent to that of __________ on the market portfolio.

Select one alternative:

(1) a forward contract

(2) a futures contract

(3) a put option

(4) a call option

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