Stock A is trading at $75. Stock B is trading at $50. We think A is...
Stock A is trading at $75. Stock B is trading at $50. We think A is a better stock than B. How can we profit from our view?
We will need Δ = 75 / 50 = 1.5 shares of #23 per 1 share of #24 to set up the trade.
We #25 300 shares of A and #26 #27 shares of B.
Homework Answers
We will need Δ = 75 / 50 = 1.5 shares of B per 1 share of A to set up the trade.
We Long 300 shares of A and Sell 450 shares of B.
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