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You're planning to replicate the Black-Scholes formula by using a portfolio of stock and risk-free asset. For the call option, you need to take a
You're planning to replicate the Black-Scholes formula by using a portfolio of stock and risk-free asset. For the call option, you need to take a (short/long) position in the underlying stock and (short/long) position in the risk-free asset. For the put option, you need to take a (short/long) position in the underlying stock and (short/long) position in the risk- free asset
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