The FTSE Index Is at 5,100

question 3

Multiple Choice

The FTSE index is at 5,100.You are short a straddle on the FTSE 100 struck at 5,100 and long a 5,000/5,200 strangle.If volatility were to increase,

• A)The value of your position would increase.
• B)The value of your position would be unaffected.
• C)The value of your position would decrease.
• D)Any of the above is possible.

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Definitions:

Passive Engagement

The act of involvement in an activity without active participation, often referring to the manner in which people consume media or interact with digital content.

Familiar Surroundings

Environments or settings that are well known and comfortable to an individual, often providing a sense of security.

Emotional Engagement

The investment of emotion and affect in activities, relationships, or learning, which can influence motivation and outcomes.

Information Processing System

A system, either computational or biological, that processes data or information following a set of procedures or algorithms.