Verify that you earn the same profit and payoff by (a) Buying the S&R index for $1000

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Verify that you earn the same profit and payoff by
(a) Buying the S&R index for $1000 and
(b) Buying a 950-strike S&R call, selling a 950-strike S&R put, and lending $931.37.

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Derivatives Markets

ISBN: 9789332536746

3rd Edition

Authors: Robert McDonald

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Question Posted: Aug 12, 2015 02:31 AM

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Verify that you earn the same profit and payoff by (a) Buying the S&R index for $1000

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We now move from a graphical representation and verification of the PutCallParity to a mathematical representation Let us first consider the payoff of ...View the full answer

Derivatives Markets

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