An Investor Can Construct a Synthetic Put by Buying a Call

question 1

True/False

An investor can construct a synthetic put by buying a call and selling short a stock.

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Definitions:

Receivables Monitoring

The process of overseeing and managing the amounts owed to a company by its customers for goods or services provided.

Net Float

The difference between checks written against and deposited in an account, which has not yet been cleared and credited or debited.

Writes Cheques

The act of creating a written document instructing a bank to pay a specific amount of money from the writer's account.

Cheques Clear

Refers to the process by which a bank verifies that the funds available in the account of the individual who wrote the cheque are sufficient to cover the amount, and subsequently moves those funds to the account of the cheque recipient.