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Chartered Financial Analyst Level 1

Chartered Financial Analyst Level 1

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An analyst evaluates three portfolios, each comprising two derivatives on the same underlying asset. The portfolios are structured as follows:

  • Portfolio 1: Long Forward Position and Long Call Option
  • Portfolio 2: Long Forward Position and Long Put Option
  • Portfolio 3: Short Forward Position and Long Call Option

Assuming all other factors remain constant, which portfolio is most likely to benefit from an increase in the underlying asset's price?

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