Question
A bank has sold a product that offers investors the total return (excluding dividends) on the Toronto 300 index over a one year period. The
A bank has sold a product that offers investors the total return (excluding dividends) on the
Toronto 300 index over a one year period. The return is capped at 20%. If the index goes down
the original investment of the investor is returned. What option position is equivalent to the
product?
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