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A call on a stock with a strike price of $60 costs $6. A put on the same stock with the same strike price and
A call on a stock with a strike price of $60 costs $6. A put on the same stock with the same strike price and expiration date costs $4.
a. Explain how a long straddle can be created from these two options.
b. Construct a table that shows the profit of the long straddle.
c. For what range of stock prices would the long straddle lead to a loss?
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