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Derivatives




Fiduciary Call


A capital-preserving tactic that is constructed by buying a European call option and a risk-free bond maturing on the option expiration date. The face value of the bond should be equal to the exercise price of the call (the call and has the same nominal value as the exercise price of the call).

This tactic helps protect its holder against downside losses.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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