Upon arriving for work on Monday, you observe a violation of putcall parity. In particular, the synthetic

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Upon arriving for work on Monday, you observe a violation of put–call parity. In particular, the synthetic forward price of dollars per yen is above the current forward rate. How would you capitalize on this information?

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International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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Question Posted: May 28, 2012 02:44 AM

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Upon arriving for work on Monday, you observe a violation of putcall parity. In particular, the synthetic

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Because the actual forward rate is below the synthetic forward rate you would want to contract ...View the full answer

International Financial Management

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