Correct answer: C. I., II. and III.

• I is correct: A strip is a long straddle plus one additional put, so it has a bearish bias.
• II is correct: A strap is a long straddle plus one additional call, so it has a bullish bias.
• III is correct: Both strategies are volatility trades. They benefit from large price movements and lose money when prices remain range-bound.
• IV is false: Both the strip and strap require buying three options instead of two, so they are more expensive than a straddle, not cheaper.