You are the financial analyst fir the firm named Sixties Wine that distributes California wine in Italy.Your...

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Finance

Youare the financial analyst fir the firm named Sixties Wine thatdistributes California wine in Italy.Your firm routinely hedges itsexposure to the EUR In the past, the firm has used long position inEUR put options to accomplish its hedging objectives. Due to achange in market liquidity conditions, the firm finds that it is nolonger possible to use EUR put options. One your colleaguerecommends that the firm use short posiions in call options on theEUR and makes the claim that "short positions in call options onthe EUR are identical to long positions on put options" Criticallyexamine this statement

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As the firm Sixties has the long position on the put option to accomplish its objectives by investing the amount of money into the market But due to change in the market liquidity conditions the firm is not able to hod the position for the Longer period of See Answer

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