Betting on Price Movement You have been watching the class action lawsuit against Kramerica Industries closely. The verdict is going to be issued in the next several weeks, and you expect the price of Kramerica (which is currently $60) to respond to the verdict according to whether it is favorable or unfavorable for the firm. Suppose you observe the option prices below. Can you show the profit table and chart from a strategy that will make money when the stock price moves in either direction (there may be more than one, but the class notes offer one suggestion!)? 50 60 70 Call prices 22.00 15.00 10.00 Put Prices 11.75 15.00 20.00 Payoff and profits Stock price at option expiration, St 30 35 40 45 50 52.5 55 57.5 60 62.5 65 67.5 70 72.5 75 80 85 90