USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 79

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00.
-Refer to Exhibit 16.6. What would the net value of a long straddle position be if the stock price at expiration is $35?

• A) -7.15
• B) -$1.15
• C) $1.15
• D) $7.15
• E) $36.15

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Definitions:

Rhythmic Repeating

The occurrence of patterns or sequences that repeat at regular intervals, often observed in natural and artificial phenomena.

Composite

A material made from two or more different substances that, when combined, produce a material with characteristics different from the individual components.

Scoria Cone

A type of volcanic cone formed from fragments of lava thrown from an erupting vent, characterized by loose, scoria rocks.

Shield

A vast geological area composed of old, stable, and typically flat Precambrian rock, often found on continents.