a) Using the formula for Put Call Parity, what combination can you make of options positions and the underlying to replicate a short put position? b) Define a Bear Spread. What kind of market move are you hoping for if you are long a bear spread? Can it be constructed using puts or calls, or both?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Please answer question attached below.

a) Using the formula for Put Call Parity, what combination can you make of
options positions and the underlying to replicate a short put position?
b) Define a Bear Spread. What kind of market move are you hoping for if
you are long a bear spread? Can it be constructed using puts or calls, or
both?
Transcribed Image Text:a) Using the formula for Put Call Parity, what combination can you make of options positions and the underlying to replicate a short put position? b) Define a Bear Spread. What kind of market move are you hoping for if you are long a bear spread? Can it be constructed using puts or calls, or both?
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