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finance questions You are the VP of Finance for the wine manufacturer SIPP. Your company wants to reduce the volatility of its cash ows by

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finance questions

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You are the VP of Finance for the wine manufacturer SIPP. Your company wants to reduce the volatility of its cash ows by making its cash ows less sensitive to changes in grape prices. It will do so by buying a call option on a grape ETF with a strike price $50 and buying aput option on a grapes E1? with a strike price of $50. Both options are American and expire in one year. Suppose that tomorrow the grape ETF trades at $60 per share. What is the payoff of this option strategy? 0 Cannot be calculated without the option premiums. 0 o 010

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