Carly Banks has been analyzing Terras Pharmaceuticals in anticipation of their upcoming earnings release. The market is not anticipating that the earnings release will be a large news event, but Banks believes that with the earnings announcement the company will release new information about an ongoing clinical trial that will cause a large movement, but she is uncertain of the direction. The current price of Terras Pharmaceuticals is $45 and Banks is considering a straddle using the following options: a. What is the cost of the straddle? By what percentage would the stock price need to move up or down to make the straddle break even? ( 2 points) Before Banks can execute her trades, an analyst report comes out predicting the release of the clinical trial data with earnings, and although the stock price is unaffected, the implied volatility on the options increases dramatically. The options data is now: b. What is the cost of the straddle? By what percentage would the stock price need to move up or down to make the straddle break even? (2 points) Carly Banks has been analyzing Terras Pharmaceuticals in anticipation of their upcoming earnings release. The market is not anticipating that the earnings release will be a large news event, but Banks believes that with the earnings announcement the company will release new information about an ongoing clinical trial that will cause a large movement, but she is uncertain of the direction. The current price of Terras Pharmaceuticals is $45 and Banks is considering a straddle using the following options: a. What is the cost of the straddle? By what percentage would the stock price need to move up or down to make the straddle break even? ( 2 points) Before Banks can execute her trades, an analyst report comes out predicting the release of the clinical trial data with earnings, and although the stock price is unaffected, the implied volatility on the options increases dramatically. The options data is now: b. What is the cost of the straddle? By what percentage would the stock price need to move up or down to make the straddle break even? (2 points)