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10. A straddle is a portfolio with long positions in a European call and put with the same strike price, maturity, and underlying. The straddle

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10. A straddle is a portfolio with long positions in a European call and put with the same strike price, maturity, and underlying. The straddle is seen to benefit from a movement in either direction away from the strike price. Show that the payoff of a straddle is ST K and construct the payoff diagram

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