arbitrage

Hi all, I think I have an interesting question: If we are long a put and long a stock (so that we are delta neutral) then we are long gamma and, both if the stock increase or decrease, our portfolio get a final positive value. Based on this (surely superficial) view, it seems that this...

Financial Risk Manager (FRM), Topic 4: Valuation and Risk Models, Fixed Income, Bruce Tuckman Chapter 1, Prices Discount Factors and Arbitrage. How do we exploit the Law of One Price (which asserts that--absent confounding factors like liquidity or taxes--is only one set of discount factors)? We...

Learning objectives: Differentiate between investment and consumption assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices...