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? $\left(\text{LO 15}-\text{2}\right)$
a. . Performance to date: Up $\text{16}\%$ .
. Client objective: Earn at least $\text{15}\%$ .
. 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 $\text{16}\%$ .
. Client objective: Earn at least $\text{15}\%$ .
. 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.