Explanation:
A. Correct because a fiduciary call consists of a long call and long bond. B. Incorrect because this combination represents a synthetic underlying. C. Incorrect because this combination represents a synthetic put.
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A fiduciary call is equal to which of the following positions?
A
Long a call and long a risk-free bond
B
Long a call, long a risk-free bond, and short a put
C
Long a call, short the underlying, and long a risk-free bond