Question

Investing in combinations of options may end up with ____ A) No difference in payoff patterns...

Investing in combinations of options may end up with ____

A) No difference in payoff patterns

B) A mirror image of past results

C) Guaranteed higher returns

D) Offsetting positions resulting in a riskless return

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Answer #1

Investing in combinations of options may end up with-

D) offsetting positions resulting in a risk less return

​​​​​​As an investor ends up having multiple position in the market there will be many offsetting positions. This position can result in a risk less profit. For example, an investor may end up buying an option at a lower rate in one market and selling it at a higher rate in another market. These two positions will offset each other and will create a risk less profit for the investor.

Do let me know in the comment section in case of any doubt.

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