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Problem 5 Which of the following determinants have a negative impact on the price of a call option? a. Price of the underlying security b.

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Problem 5 Which of the following determinants have a negative impact on the price of a call option? a. Price of the underlying security b. Volatility of the underlying security c. Time to expiration d. Strike price of the call option Problem 6 Which of the following strategies pays off when the volatility is expected to be low? a. Long straddle b. Short straddle c. Bullish spread d. Bearish spread

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