You Have a Portfolio with Long Positions in Both Puts

question 22

Multiple Choice

You have a portfolio with long positions in both puts and calls. The volatility in the market rises.

• A) Your portfolio gains in value.
• B) Your portfolio gains on the calls and loses on the puts.
• C) Your portfolio gains on the puts and loses on the calls.
• D) Your portfolio is now more risky and is therefore worth less than before.

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Definitions:

Alfred Hershey

An American bacteriologist and geneticist, awarded the Nobel Prize in Physiology or Medicine in 1969 for his work on the genetics of viruses, including the famous Hershey-Chase experiment.

Martha Chase

An American geneticist who, along with Alfred Hershey, performed experiments confirming that DNA is the genetic material of life.

Experiments

Carefully designed procedures to test hypotheses, establish cause and effect, or discover new phenomena under controlled conditions.

Phosphodiester Bonds

chemical bonds that link nucleotides together in DNA and RNA, forming the backbone of these molecules.