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Why an american call options on futures could be optimally

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Reference no: EM132919633

Problem (a) Explain why an American call options on futures could be optimally exercised early while call options on the spot can not be optimally exercised. Assume that there is no dividend.

Problem (b) Explain how to use call options and put options to create a synthetic short position in stock.

Reference no: EM132919633

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