Consider a Position in a Long Straddle at Strike 90

question 20

Multiple Choice

Consider a position in a long straddle at strike 90 and a short straddle at strike 100,both for the same maturity.which of the following properties is valid for this position?

• A)The payoff is increasing in the stock price.
• B)The payoff is always positive.
• C)The payoff is always negative.
• D)The payoff is unbounded.

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Definitions:

Evolutionary Studies

The scientific discipline that examines how organisms have diversified and adapted over time through genetic changes and natural selection.

Brood Pouch

A special chamber used by certain animals for carrying and protecting their offspring.

Gene Recruitment

The evolutionary process where a gene acquires a new function, different from its original role.

Paralog

Genes that arise by duplication within the same genome and may diverge to perform functions related to or distinct from the original gene.