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Indicate whether each of the following two statements below is true, false or uncertain and justify your response . (a)It is theoretically impossible for an
Indicate whether each of the following two statements below is true, false or uncertain and justify your response.
(a)It is theoretically impossible for an out-of-money European call and an in-the-money European put to be trading at the same price. Both options are written on the same non-dividend paying stock.
(b)By simultaneously buying a call and short-selling the underlying asset, a synthetic short position is created in the put.
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