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Help! Please show work!! Answer is D, but I'm struggling to come up with the work!! Thank you!! Q24 (4 pts) You want to purchase
Help! Please show work!! Answer is D, but I'm struggling to come up with the work!! Thank you!!
Q24 (4 pts) You want to purchase a share of Disney's stock and sell it after one year. However, stock market trading is currently suspended because hackers are attacking the stock market exchange. Fortunately, the hackers haven't taken FIN 367 and disregard the option market. Using the lesson from FIN 367 class, you are going to invest in a synthetic Disney stock using Disney stock options with strike price $140 and 1-year maturity. Which of the following portfolios is the synthetic Disney stock (long position)? A. Buy a put, buy a call B. Buy a put, write a call C. Write a put, buy a call D. Write a put, buy a call, lend $140 face value at the risk-free rate with maturity of 1 year E. Write a put, buy a call, borrow $140 face value at the risk-free rate with maturity of 1 year
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