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Do you think option is like an insurance contract

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a. Do you think option is like an insurance contract? How is it different from a futures contract? Is it possible to use an option for hedging?

b. Estimate the payoff for the following two portfolios in separate tables:

Calls (strikes in parentheses): C(90) - 2C(100) + C(110).

Puts (strikes in parentheses): P(90) - 2P(100) + P(110).

Also what is the relationship between the two portfolios?

Reference no: EM132607343

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