You Hold a Straddle on a Stock That You Bought

question 3

Multiple Choice

You hold a straddle on a stock that you bought a month ago and that still has two months to expiry. Assume the options are European. An unexpected increase of $1 in the price of the stock

• A) Changes the value of your straddle by more than $1.
• B) Changes the value of your straddle by at most $1.
• C) Leaves the value of your straddle unchanged.
• D) Any of the above can happen.

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Definitions:

Ethical Leadership

A style of leadership that involves leading others in a manner that respects ethical principles and values.

Spiritual Leadership Theory

A leadership model that emphasizes the importance of values, beliefs, and a sense of purpose in motivating followers.

Societal Benefits

The advantages or positive outcomes that contribute to the well-being or improvement of society as a whole.

Socialized Power Orientation

A focus on using power and influence for the benefit of the larger group or community, rather than for personal gain.