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:

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