A Replicating Portfolio for a Derivative Security Is

A replicating portfolio for a derivative security is

A) A portfolio consisting of long and short positions in the derivative.
B) A portfolio that has the same payoffs as the derivative.
C) A portfolio that has payoffs at least as great as, and in some states greater than, the payoffs from the derivative.
D) A portfolio that combines the derivative with another derivative on the same underlying so as to make the portfolio riskless.

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