An investor can create a synthetic call option by
A) taking a long position in a stock, simultaneously buying a put option on the stock, and investing the present value of the strike price in Treasury securities.
B) taking a long position in a stock, and simultaneously buying a put option on the stock.
C) short selling the stock and using the proceeds to buy a put option on the stock and investing the rest in Treasury securities.
D) borrowing money at the risk-free rate and using the funds to invest in the stock itself.
Correct Answer:
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Q18: A stock is currently selling for $51.00.
Q19: You bought a call option with a
Q20: One option contract is typically an option
Q21: Assume an investor buys a call option
Q22: Explain how you could duplicate a short
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