How Can a Straddle Be Created

question 4

Multiple Choice

How can a straddle be created?

• A) Buy one call and one put with the same strike price and same expiration date
• B) Buy one call and one put with different strike prices and same expiration date
• C) Buy one call and two puts with the same strike price and expiration date
• D) Buy two calls and one put with the same strike price and expiration date

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Definitions:

Time Period

A specific duration or span of time within which certain actions are taken or conditions apply.

Goods-in-bailment

A legal term referring to the process where personal property is transferred temporarily into the care of another, known as the bailee.

Negotiable Document

An official note that commits to paying a designated amount, either immediately upon request or at a predetermined date, with the payer's name indicated on the note.

Risk of Loss

The legal and financial responsibility for damages or loss to goods, typically determined by the terms of a contract or by law.