The difference in profit from an actual put and a synthetic put is A)X B)S_T - X C)X - S_T D)S_T + X(1 + r)^-T E)none of the above

Question

Quizplus · Accepted Answer

The difference in profit between an actual put and a synthetic put is not represented by any of the given formulas. A synthetic put is created using a combination of financial instruments (such as stocks and call options) to mimic the payoff of a put option. The profit difference would depend on the specific prices and costs of these instruments, which are not detailed in the options provided.

The Difference in Profit from an Actual Put and a Synthetic