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Assuming there are no active markets for puts. Discuss how you can replicate the payoff of...

Assuming there are no active markets for puts. Discuss how you can replicate the payoff of buying a put.

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One of the ways to replicate put payoff is by using the black scholes equation for a put option

The replicating portfolio of a put option always consists of a long position in the bond and a short position in the stock, implying that put options on a positive beta stock will have a negative beta.

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