Lower bounds and put-call parity relationship

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Reference no: EM131886881

1. What would it imply if empirical studies showed that the lower bounds and put-call parity relationship does not hold in the equity and option markets?

2. In what sense does a (short stock + long call) or a (long stock + long put) position create a hedge? When would this strategy make sense?

3. In what sense does a (long stock + written call) or a (short stock + written put) position create a hedge? When would this strategy make sense?

Reference no: EM131886881

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