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Describe the composition of the initial riskless portfolio

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Reference no: EM132015788

If the sequence of stock prices that DEW stock follows over the year is $40.00, $42.00, $40.32 and $38.71, describe the composition of the initial riskless portfolio of stock and options you would form and all the subsequent adjustments you would have to make to keep this portfolio riskless. Assume the one-year risk-free rate is 6 percent.

Reference no: EM132015788

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