[Verse 1] When you need to price a complex deal But the market's missing what you feel Take the basics that you know are there Stocks and bonds traded everywhere Mix and match to make it right Build a twin that shines as bright [Chorus] Replicate, replicate, copy every flow Combine the simple parts to make the complex grow Same cash in, same cash out, that's the golden rule Replication strategy is your pricing tool [Verse 2] Start with payoffs at the end Map each dollar you must spend If it pays when markets rise Buy some stocks to match that prize When it pays if markets fall Put options answer that call [Chorus] Replicate, replicate, copy every flow Combine the simple parts to make the complex grow Same cash in, same cash out, that's the golden rule Replication strategy is your pricing tool [Bridge] Portfolio one, portfolio two If they pay the same thing through and through Then their prices must be equal That's the law that makes it legal Arbitrage will close the gap When the pricing starts to snap [Verse 3] Long or short in different ways Match the instrument's risky plays Risk-free bonds for guaranteed parts Basic building blocks forarts When your synthetic twin is done Fair value battle has been won [Chorus] Replicate, replicate, copy every flow Combine the simple parts to make the complex grow Same cash in, same cash out, that's the golden rule Replication strategy is your pricing tool [Outro] From simple parts to complex whole Replication is the goal Fair value found through matching flows That's how every trader knows
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