A contingent-pay option is replicated by which of the following combinations?
A)long an ordinary call and long an ordinary put
B)long an ordinary call and short a cash-or-nothing call
C)long an ordinary call and short an asset-or-nothing call
D)long an ordinary call and long an equity forward
E)long an ordinary call and long a risk-free bond

Question

Quizplus · Accepted Answer

The Answer of A contingent-pay option is replicated by which of the following combinations?
A)long an ordinary call and long an ordinary put
B)long an ordinary call and short a cash-or-nothing call
C)long an ordinary call and short an asset-or-nothing call
D)long an ordinary call and long an equity forward
E)long an ordinary call and long a risk-free bond

A Contingent-Pay Option Is Replicated by Which of the Following