In reading 15 example 1, it asks us to show how to hedge the position of a forward contract sold to a client wanting to buy shares at $X. The solution was to use a synthetic long forward position comprised on long call and short put.
I can see the reasons for the long call to negate the risk of the original short forward sold to a client. But why do we need to also short a put? Is it to make it a zero-cost synthetic position? Because if the price falls, the client (who entered into the original forward contract) can buy the shares on open market instead of exercising the forward contract.
