To Create the Arbitrage-Free Synthetic Put After One Period (In

question 11

Multiple Choice

To create the arbitrage-free synthetic put after one period (in the down state) you need to:

• A) short sell 1 share of the stock and buy 103.70 units of the money market account
• B) short sell 0.14 shares of the stock and buy 18.12 units of the money market account
• C) buy 0.48 shares of the stock and short sell 42.2642 units of the money market account
• D) buy 0.9343 shares of the stock and short sell 93.2677 units of the money market account
• E) None of these answers are correct.

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Definitions:

Raw Input

Unprocessed data entered into a computer system or application for further processing or analysis.

Control Commands

Instructions sent to a computer or device to perform specific operations or actions, often used in programming and managing systems.

Flow Of The Program

A term denoting the sequence in which a program's instructions are executed or the logical progression of tasks performed.

Prolog

A high-level programming language associated with artificial intelligence and computational linguistics, focused on logic programming.