Refer to the previous question, but assume that the call and put option premiums are $.035 per unit and $.025 per unit, respectively.

a. Construct a contingency graph for a long pound straddle.

b. Construct a contingency graph for a short pound straddle.

Data from previous question

One year ago, you sold a put option on 100,000 euros with an expiration date of 1 year. You received a premium on the put option of \($.04\) per unit. The exercise price was \($1.22.\) Assume that 1 year ago, the spot rate of the euro was \($1.20,\) the 1-year forward rate exhibited a discount of 2 percent, and the 1-year futures price was the same as the 1-year forward rate. From 1 year ago to today, the euro depreciated against the dollar by 4 percent. Today the put option will be exercised (if it is feasible for the buyer to do so).