Series 3: Exercise

Exercise

Match the term with the correct answer choice.

A. Synthetic short put

B. Synthetic long put

C. Synthetic short call

D. Synthetic long call

E. Synthetic long futures contract

F. Synthetic short futures contract

1. A _____ occurs when an investor is long a futures contract and long a put option on that futures contract.

2. A _____ occurs when an investor is short a futures contract and long a call on that futures contract.

3. A _____ occurs when an investor is short a call and long put, each with the same strike price, on an identical futures contract.

4. A _____ occurs when an investor is lo