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Which portfolio would you prefer to own?

Portfolio A: A risk free bond that will pay you $10,000 in 90 days

Portfolio B: Long position in 100 shares of IBM, long position in a put contract with a strike price of $100 and a short position in a call contract with a strike price of 100. The stock price is $105, the put is trading for $4.37 and the call is trading for $10.60.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92258845

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