Suppose that you buy 100 shares of stock for $50 each and sell a 55 strike...
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Suppose that you buy 100 shares of stock for $50 each and sell a 55 strike call option for $2. Synthetically, what is this equivalent to doing? Ignore the time value of money function in the put-call parity equation. Suppose that you buy 100 shares of stock for $50 each and sell a 55 strike call option for $2. Synthetically, what is this equivalent to doing? Ignore the time value of money function in the put-call parity equation.
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Solution The scenario described involves buying 100 shares of stock and selling a call option with a strike price of 55 for 2 Lets break down the comp... View the full answer
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