You Buy a Call Option and a Put Option on General

question 65

Multiple Choice

You buy a call option and a put option on General Electric. Both the call option and the put option have the same exercise price and expiration date. This strategy is called a ________.

• A) time spread
• B) long straddle
• C) short straddle
• D) money spread

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Definitions:

Statistical Analysis

The process of collecting, reviewing, interpreting, and presenting data to discover underlying patterns and trends.

P < .01

Indicates that the probability of the observed data (or more extreme) given that the null hypothesis is true is less than 1%, suggesting strong evidence against the null hypothesis.

Null Hypothesis

A presumption in statistical inference that indicates no significant variance between groups or no significant relationship between variables.

Statistic

Numeric characteristic of a sample.