Example of Model-independent hedging
Give an example of Model-independent hedging.
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Model-independent hedging: An illustration of this hedging is put–call parity.
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At Milan bourse, Fiat stock closed at EUR31.90 per share on Friday, September 10, 1999. Fiat trades as & ADR on the NYSE. One underlying Fiat shares equivalent one ADR. On September 10, the $/EUR spot exchange rate was $1.0367/EUR1.00. At this exchange
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