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Synthetic Instruments

January 5, 2016

Use put-call parity

+ is long

– is short

Synthetic call = put + stock – riskless discount bond

Synthetic put = call – stock + riskless discount bond

Synthetic stock = call – put + riskless discount bond

Synthetic riskless discount bond = put + stock – call

S + P = B + C

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From → Asset Valuation

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