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A 'lookback straddle' pays the holder the difference between the maximum and minimum stock price over a given period of time. Use sketches to help

A 'lookback straddle' pays the holder the difference between the maximum and

minimum stock price over a given period of time. Use sketches to help with the

following explanations:

(i) Explain why the holder is neutral about the direction of stock price

movements.

(ii) Explain why the holder is said to be "long volatility".

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