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Old 02-09-2009, 08:56 AM
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Dedicated111 Dedicated111 is offline
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Default ASM 5th Ed - Exercise 3.6

In the solution to exer 3.6, there is only a solution for if Cd = 0. Okay, I understand this, but what about if Cd does not equal 0?
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Old 02-09-2009, 09:54 AM
Abraham Weishaus Abraham Weishaus is offline
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If Cd were not zero, the replicating portfolio would have 1 share of the stock, not 0.5.
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Old 02-09-2009, 10:27 AM
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oooo. Yup!...I knew there was something that was completely obvious and my eyes were not catching it.
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