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Suppose an investor holds two portfolios. In portfolio A there are:Suppose an investor holds two portfolios. In portfolio A there are: A European put with
Suppose an investor holds two portfolios. In portfolio A there are:Suppose an investor holds two portfolios. In portfolio A there are:
A European put with oneyear maturity and the strike price of $
A share of stock, which is currently priced at $
n portfolio B there are:
A European call with oneyear maturity and the strike price of $
A oneyear bond with a continuous compound interest rate of that pays $ at the end of one
year.
Which portfolio, A or B is more valuable to the investor?
O Portfolio A is more valuable.
O Portfolio B is more valuable.
O Unclear. It depends on the future stock price.
O Portfolio A and B are equally valuable.
A European put with oneyear maturity and the strike price of $
A share of stock, which is currently priced at $
In portfolio B there are:
A European call with oneyear maturity and the strike price of $
A oneyear bond with a continuous compound interest rate of that pays $
at the end of one year.
Which portfolio, A or B is more valuable to the investor?
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