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An investor is very confident that the price of a stock will change significantly over the next few months; however, the direction of the

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An investor is very confident that the price of a stock will change significantly over the next few months; however, the direction of the price change is unknown. Which option strategies are most likely to produce a profit if the stock price change significantly? Briefly discuss the idea of selected strategies. (5 marks) The legendary investor Warren Buffett believes that derivatives are "financial weapons of mass destruction." Please name four option strategies that illustrate well how risky the employment of derivative securities without proper understanding can be.

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