Hi, Book 5 p 82. Shoudn’t the option price in the example be 0,4$ (not 4$)? We have: at time 0: 60 000 sh x 50$ each = 3 000 000$ we sell 100 000 x 0,4$ each option = 40 000$ at time 1: we have: 60 000 sh x 51$ each = 3 060 000$ we lose 100 000$, becasue = 100 000 options x 1$ (51 - 50 = 1, we must sell sh for 50$) so… we have totally 2 960 000$ at time 1 + 40 000$ (from selling options at time 0) = 3 000 000$ which is equal to 60 000 sh x 50$ each = 3 000 000$ (our initial values of pure shares). So portfolio is hedged.

anyone?

I’d like to help, but don’t have Schweser. Don’t they have some sort of number you can call to ask questions?

Don’t they have some sort of number you can call to ask questions? first heard of it…