Question
To create a (long) synthetic stock, you should... Buy the call, deposit the present value of the strike in a risk free bank account and
To create a (long) synthetic stock, you should...
Buy the call, deposit the present value of the strike in a risk free bank account and write a put (for the same strike and expiration as the call) . | ||
Buy the call take out a loan in the amount of PV(X) and buy a put (for the same strike and expiration as the call). | ||
Sell a call, borrow the present value of the strike, and buy a put (for the same strike and expiration as the call) | ||
Write a call, deposit the present value of the strike in a risk free bank account and buy a put (for the same strike and expiration as the call) . |
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