
362 Derivatives and Risk Management
R E V I E W Q U E S T I O N S
1. Explain how one can synthetically create a call option on an
asset if the underlying asset, a put option on the asset, and a
risk-free security are available to trade.
2. Explain how one can synthetically create a put option on an
asset if the underlying asset, a call option on the asset, and a
risk-free security are available to trade.
3. Explain how one can synthetically create a long position on an
asset if a call option on an asset, a put option on the asset, and
a risk-free security are available to trade.
4. Explain how one can synthetically create a lon ...