Assume That a Speculator Received News That Makes Her Believe

Multiple Choice

Assume that a speculator received news that makes her believe that the yen will appreciate or depreciate substantially in the near future, but she is not certain of the direction. Also assume that exercise price of call and put options are the same. The most appropriate method for speculation is ____and it may be achieved by ____.

A) straddle; purchase put option and purchase call option.
B) strangle; purchase put option and sell call option.
C) strangle; sell put option and sell put option.
D) straddle; sell put option and buy call option.