For synthetic positions, is div yield discounting only necessary when determining the number of underlying shares that must be held at the beginning of term? Are there any other scenarios where you would use div yield?
It is discounted and then compounded again by div. yield. Thus I even wonder if discounting is necessary since you will calculate the number of shares anyway.
Class teacher (Online Schweser classes) said it’s rare for the Institute to ask a question you to demonstrate how the Synthetic position works. Although, not impossible! I would argue, know how to initiate the position and you’re good.
LincB, you are correct sir, that’s the only scenario I have come across. To calculate the number of initial shares that should be held. Or if you happen to have the initial number of shares, you can likewise solve for the terminal number, you know how the institute likes them games. haha.