Series 7 - General Securities Representative Exam
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An investor sold a JKL corp December 45 straddle for 6.00. What is his maximum loss?
$600
A
Unlimited
B
$3,900
C
$5,100
D
Explanations
Selling a straddle is selling a call and a put of the same strike price. Since a stock could rise to infinity, the maximum risk is unlimited