Does cost of portfolio insurance increase or decrease

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Reference no: EM131237728

1. Show that a European call option on a currency has the same price as the corresponding European put option on the currency when the forward price equals the strike price.

2. Would you expect the volatility of a stock index to be greater or less than the volatility of a typical stock? Explain your answer.

3. Does the cost of portfolio insurance increase or decrease as the beta of a portfolio increases? Explain your answer.

Reference no: EM131237728

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