Correct answer is Affice ffice" />
When an investor expects a large move in stock price, either up or down, he can purchase a straddle which leads to large profit if stock price moves significantly in either direction.
Strategy b) could lead to significant loss if investor's expectation is right.
Strategy c) works if investor believes that large stock price moves are unlikely.
Strategy d) works if investor believes that stock price will increase.
ffice:smarttags" />Reading: John Hull, Chapter 8. | 
发表于 2009-6-13 13:34
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