Discuss the inception profit and the pitfalls of its use

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Reference no: EM132183911

Question - Discuss the following in a one-page paper. (Provide references)

a. Inception profit and the pitfalls of its use.

b. Choices for a trader when the forward price of an nonworking asset is too low.

c. The effect of stock price increases (with all else remaining the same) on the value of calls and puts; providing a real world example.

d. The possible effect of crashophobia on volatility smiles after the market crash of 1987.

Reference no: EM132183911

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