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) Will increase the value of your straddle.
B) Will decrease the value of your straddle.
C) Will have no effect on the value of your straddle.
D) Can increase, decrease, or leave unchanged the value of the straddle.
Correct Answer:
Verified
Correct Answer:
Verified
Q18: The current stock price is $50,
Q19: A stock is trading at $80.
Q20: The delta of an option measures, approximately,<br>A)
Q21: Which of the following statements is true?
Q22: The current stock price is $50,
Q24: The vega of a _ is highest
Q25: A stock is trading at $20.
Q26: You hold a portfolio of a long
Q27: The gamma of an option is<br>A) The
Q28: You expect a sizable jump in the