A trader buys an at the money call and put with the same strike price and maturity date. Which of the following statements is true?

1. This strategy will be unprofitable because the loss on one option will offset the gains on the other option.
2. This strategy is unprofitable because volatility expectations will already be reflected in the call and put premiums.
3. The trader is speculating that the underlying assets volatility will increase.
4. The trader is speculating that the underlying assets volatility will decrease.
5. None of the above.

Group of answer choices

A

B

C

E

D