Question
On a market, a share is traded at a spot price of SEK 621.68 and the bank offers 1.92% interest on both deposits and loans.
On a market, a share is traded at a spot price of SEK 621.68 and the bank offers 1.92% interest on both deposits and loans. Furthermore, there are call and put options issued on the share, both with a term of one year and an exercise price of SEK 637. The call option trades for SEK 36.15 and the put option trades for SEK 39.47. After a period of turbulence on the stock exchange, the authorities have decided to ban short selling. Show how, by combining other financial instruments, you can take a short position in the share despite the authorities' ban. Answer by combining different positions in the list of answer options.
a)Deposit SEK 625 in the bank.
b)Deposit SEK 637 in the bank.
c)Deposit SEK 621,68 in the bank.
d)A long position in a call option.
e)A long position in a put option.
f)A loan of SEK 625 at the bank.
g)A loan of SEK 637 at the bank.
h)A loan of SEK 621,68 at the bank.
i)A short position in a call option.
j)A short position in a put option.
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