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A riskless hedge can best be defined as




A riskless hedge can best be defined as;A situation in which aggregate risk can be reduced by derivatives transactions between two parties.;A hedge in which an investor buys a stock and simultaneously sells a call option on that stock and ends up with a riskless position.;Standardized contracts that are traded on exchanges and are "marked to market" daily, but where physical delivery of the underlying asset is virtually never taken.;Two parties agree to exchange obligations to make specified payment streams.;Simultaneously buying and selling a call option with the same exercise price.


Paper#31002 | Written in 18-Jul-2015

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