Briefly Explain How to Replicate the Payoff of a Risk-Free

question 51

Essay

Briefly explain how to replicate the payoff of a risk-free asset using put-call parity.

---

Definitions:

Body Language

Nonverbal cues expressed through physical behavior, such as gestures and posture, that communicate feelings and intentions.

Unethical Behavior

Actions that violate moral or professional principles, often leading to negative consequences.

Illegal Behavior

Actions that violate laws and are punishable by the legal system.

Changing Technology

The ongoing evolution and advancement of tech tools, systems, and devices, impacting various aspects of life and business.