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A 6-month European call option with a strike price of $25 costs $2.24. A 6-month European put option with a strike price of $20 costs
A 6-month European call option with a strike price of $25 costs $2.24. A 6-month European put
option with a strike price of $20 costs $1.31.
a. Explain how a strangle can be created from these two options.
b. Construct a table that shows the profit from the strategy.
c. For what range of stock prices would the strategy lead to a profit.
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