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Corporate Finance · End Term · 21 Dec 2025 · September 2025 term

Question 16: A long straddle strategy is executed by buying a one-yea…

Question 16

+3 marksOne correct option

A long straddle strategy is executed by buying a one-year call option (price Rs 5) and a one year put option (price Rs 3) with the same strike price of Rs 70. If the stock price at expiration is Rs 80, what is the net profit (in Rupees) from this position?

  1. A

    Rs 10

  2. B

    Rs 5

  3. C

    Rs 2

  4. D

    There is a loss

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Correct answer

  • C

    Rs 2

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Question 16 of 30 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 21 Dec 2025, in the September 2025 term (Corporate Finance 18 Dec 25). It carries 3 marks.

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