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A trader at a bank takes a call from a customer interested in buying a $50.00 straddle. The current stock price is $49.00, the interest

A trader at a bank takes a call from a customer interested in buying a $50.00 straddle. The current stock price is $49.00, the interest rate is 6%, the implied volatility is 40%, and there are 90 days in a 365 day year until expiry. The customer shows the bank trader a $6.50 bid for the structure. Relative to fair value, how cheap/expensive is the customer's bid?

Please enter the number rounded to two decimal places, where $1.234 would be 1.23

Express the amount below fair value as a negative number, the amount above fair value as a positive number.

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