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:

Simplified Expression

An equivalent expression that has been condensed to as few terms as possible, often by combining like terms or using algebraic properties.

Shaded Region

The area marked or colored differently than its surroundings, often used in diagrams or graphs to denote a specific area.

Expand

To simplify an expression or equation by multiplying out brackets and combining like terms.

Special Product Formula

Mathematical formulas that provide shortcuts for multiplying certain types of polynomials.