A Short Straddle

question 137

Multiple Choice

A short straddle:

• A)consists of a long call and a long put
• B)consists of a long and a short call with same exercise price
• C)will make the greatest profit if the share price at expiry is as close as possible to the exercise price
• D)is a strategy that profits from high volatility.
• E)None of these.

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Definitions:

Referent Power

The ability to influence others based on personal relationships or charisma.

Position Power

The power or authority attributed to one's position or rank within an organization, enabling influence over others.

Leader Power

The capacity of a leader to influence the behavior of others or the course of events, often derived from varied sources such as authority, expertise, or personal attributes.

Expert Power

Expert power derives from an individual's expertise, skills, or knowledge, which can influence others' behaviors or attitudes due to the value of the expertise.