Well my confusion is regarding replicating portfolio approach suppose i build a portfolio with short stock and Investment at RF. I am getting the correct downside answer but the upside call price is more so where am i committing the ...
SSEI Q Forum Latest Questions
Why is B correct, Buying a Put Option (P+) is a short position right?
How to identify whether the option given for hedging in derivative is home cutrency option or a foreign currncy option?
Why are we not taking Cu and Cd as calculated for Co determination for calculation of delta for hedged portfolio? Instead we are directly taking Cu and Cd as if it’s one period BM.
Just a quick doubt, in a contingent claim which party is exposed to counterparty default risk? Is it the long position or the short position?
The no-arbitrage condition is violated at option expiry when the value of an in-the-money: put option is below its exercise price. put option is below its exercise value. call option is below the price of its underlying. I chose option 2 (which is correct) ...
