108 Generalization (continued) Consider the portfolio that is long A shares and short 1 derivative Soda-f The portfolio is riskless when SouA-fu= Sod 4-fa or fuf △ Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 10.8 Generalization (continued) • Consider the portfolio that is long D shares and short 1 derivative • The portfolio is riskless when S0uD – ƒu = S0d D – ƒd or D = − − ƒu d f S0 u S0 d S0 uD – ƒu S0dD – ƒd S0– f