Final answer:
Buying a straddle is the best strategy for a customer who believes the stock price will sharply rise or fall. This takes advantage of volatility by gaining from either direction. Additionally, in finance, more supply can decrease interest rates and increased demand for loans can increase loan quantity.
Step-by-step explanation:
If a customer believes that the market price of a stock will sharply rise or fall in the near future, buying a straddle is typically considered the best strategy. This is because a straddle, which involves buying a call option and a put option on the same stock with the same expiration date and strike price, can profit from large movements in either direction. On the other hand, writing a call (option A) is a strategy that anticipates a neutral or declining market, not a sharp rise or fall. Buying a call option (option B) would be appropriate if the customer strongly believes the price will rise, and writing a straddle (option C) requires selling both call and put options, anticipating minimal movement in the stock price, which does not align with the customer's belief.
In relation to the changes in the financial market and interest rates, a rise in supply of money (option C) will generally lead to a decline in interest rates, as increased supply of funds makes borrowing cheaper. Conversely, an increase in the quantity of loans made and received would most likely be caused by a rise in demand for loans (option A), as more individuals or businesses seek to borrow money, or by an increase in money supply.