Chapter 07 · Section 7.1

Short Straddle Question 4

An increase in volatility will:

a) decrease the value of a long straddle and increase your return.
• b) have no effect on the value of a long straddle.
  No.
  c) increase the value of a long straddle and increase your return.
  d) increase the value of a long straddle and decrease your return.
  e) decrease the value of a long straddle and decrease your return.