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You hold a portfolio of an asset-or-nothing call and a cash-or-nothing put option written on a stock that does not pay dividends. The strike price

You hold a portfolio of an asset-or-nothing call and a cash-or-nothing put option written on a stock that does not pay dividends. The strike price of the options is the same. The payout of the cash-or-nothing option if it is exercised equals the strike price. Your portfolio is equivalent to

  1. A plain-vanilla call option.
  2. A plain-vanilla put option.
  3. A covered call position, i.e., a long stock + short plain vanilla call.
  4. A protective put position, i.e., a long stock + long put option.
  5. None of the other answers are correct.

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