What Strategy Is an Investor Most Likely to Employ to Insure

question 10

Multiple Choice

What strategy is an investor most likely to employ to insure against the losses associated with a straddle write?

• A) Butterfly spread
• B) Strangle
• C) Ratio call write
• D) Bull spread

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Definitions:

Estimated Costs

Costs that are predicted based on historical data, trends, and analyses, used for budgeting, planning, and decision-making purposes.

Cost To Sell

The expenses directly associated with the disposal of an asset, excluding financing costs and income taxes.

Fair Value Movements

describes changes in the fair value of an asset or liability over time, which may be recognized in profit or loss or other comprehensive income.