Question
Suppose there are call options and forward contracts available on coal, but no put options. Show how a financial engineer could synthesize a put option
Suppose there are call options and forward contracts available on coal, but no put options. Show how a financial engineer could synthesize a put option using the available contracts. What does your answer tell you about the general relationship among puts, calls and forwards?
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Public Finance In Canada
Authors: Harvey Rosen, Beverly George Dahlby, Roger Smith, Jean-Francois Wen, Tracy Snoddon
3rd Canadian Edition
0070951659, 978-0070951655
