... of Prices)All stock and bond prices are strictly positive,A(t) > 0andS(t) > 0fort =0, 1.The total wealth of an investor holding x stock shares and y bonds at atime instant t =0, 1isV ... between stock and options.Options can also be employed to reduce risk. Consider an investor planning to purchase stock in the future. The share price today is S(0) = 100 dollars,but the investor ... Liquidity and Short Selling) An investor may hold any number x and y of stock shares and bonds, whetherinteger or fractional, negative, positive or zero. In general,x, y ∈ R.The fact that one can...