Consider a Position in a Long Straddle at Strike 90

question 15

Multiple Choice

Consider a position in a long straddle at strike 90 and a short straddle at strike 100, both for the same maturity. which of the following properties is valid for this position?

• A) The payoff is increasing in the stock price.
• B) The payoff is always positive.
• C) The payoff is always negative.
• D) The payoff is unbounded.

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Definitions:

Nation'S Currency

The legal tender issued by a country's central bank or government, serving as the medium of exchange within the country.

Exports And Imports

Goods and services sold to other countries (exports) and goods and services purchased from other countries (imports).

Net Transfers

The difference between the total amounts of transfers received and the total amounts of transfers paid out by an individual, household, or country.

Balance Of Payments

An accounting record of all monetary transactions between a country and the rest of the world over a specific time period.