CONNECT WITH LEARNSMART FOR BODIE: ESSE
CONNECT WITH LEARNSMART FOR BODIE: ESSE
11th Edition
ISBN: 9781265046392
Author: Bodie
Publisher: MCG
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Chapter 15, Problem 9PS

You are a portfolio manager who uses Options positions to customize the risk profile of your chants. In each case, what strategy is best given your client’s objective? LO 15 2
a. . Performance to date: Up 16 % .
. Client objective: Earn at least 15 % .
. Your scenario: Good chance of large stock price gains or large losses between now and end of year.
i. Long straddle.
ii. Long bullish spread.
iii. Short straddle.
b. . Performance to date: Up 16 % .
. Client objective: Earn at least 15 % .
. Your scenario: Good chance of large stock price losses between now and end of year.
i. Long put options.
ii. Short call options.
iii. Long cal] options.

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