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:

Psychoanalysis

A therapeutic approach and theory of psychology developed by Sigmund Freud, focusing on unconscious processes and childhood experiences.

Unconscious Motives

Drives or desires that an individual is not aware of but that influence behaviors and decisions.

Personality

Personality encompasses the unique, consistent patterns of thinking, feeling, and behaving that characterize an individual.

Functionalists

Psychologists who focus on the function of mental processes and behaviors in an individual's adaptation to the environment.