It Is Possible to Replicate an Investment in a Call

question 74

True/False

It is possible to replicate an investment in a call option by a levered investment in the underlying asset.

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Definitions:

Cash Flow Hedge

A financial strategy to mitigate the risk of future cash flow fluctuations, typically related to variable interest rates, foreign exchange rates, or commodity prices.

India Rupee

The India Rupee (INR) is the official currency of India, used as the medium of exchange within the country.

Fair Value Hedge

A hedging strategy used to protect against changes in the fair value of assets or liabilities.

Account Payable

The amount of money owed by a company to its creditors for goods or services that have been delivered or used, but not yet paid for.