Suppose that a person borrows the present value of euro100, Ask an Expert

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Suppose that a person borrows the present value of €100, buys a six month put option on stock Y with an exercise price of €150 and sells a six month put option on Y with an exercise price of €50.

a) suggest two other combinations of loans, options and the underlying stock that would give the person the same payoffs and explain how did you deduce these combinations.

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Financial Management, Finance

Category:- Financial Management
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