The FTSE Index Is at 5,100

question 24

Multiple Choice

The FTSE index is at 5,100. You are short a straddle on the FTSE 100 struck at 5,100 and long a 5,000/5,200 strangle. If volatility were to increase,

• A) The value of your position would increase.
• B) The value of your position would be unaffected.
• C) The value of your position would decrease.
• D) Any of the above is possible.

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