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Why short position in call option can lead to unlimited loss

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Reference no: EM132911702

Problem 1: Explain how a change in general economic circumstances may affect the value of a firm. Give a practical example.

Problem 2: Explain why a short position in a call option can lead to unlimited losses. Give a practical example.

Problem 3: Explain the difference between relative and absolute purchasing power parity. Which is a more realistic representation of exchange rate determination? Why?

Reference no: EM132911702

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