Suppose you buy a straddle: a portfolio made up of a European call and of a European put option on the same non-dividend paying stock, with the same exercise price of X=$100, and an expiration date of T=1 year. The price of the call is $5 and that of the put is $10. If the stock price at expiration is equal to $105, what is the holding period return (HPR) on your option portfolio? HPR = 10/10 - 1 = -0% HPR = 15/10 - 1 = 50% HPR = 5/15 - 1 = -66% HPR = 10/15 - 1 = -33% Suppose you buy a straddle: a portfolio made up of a European call and of a European put option on the same non-dividend paying stock, with the same exercise price of X=$100, and an expiration date of T=1 year. The price of the call is $5 and that of the put is $10. If the stock price at expiration is equal to $105, what is the holding period return (HPR) on your option portfolio? HPR = 10/10 - 1 = -0% HPR = 15/10 - 1 = 50% HPR = 5/15 - 1 = -66% HPR = 10/15 - 1 = -33%