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Probability 0.2 0.3 0.2 0.2 0.1 Stock price $80 $90 $100 $110 $120 Gain from long strangle $15 $5 $0 $10 $20 A long strangle

Probability 0.2 0.3 0.2 0.2 0.1
Stock price $80 $90 $100 $110 $120
Gain from long strangle $15 $5 $0 $10 $20

A long strangle is created using two options. For each option in the strangle above, indicate whether it is a put or a call, whether it is bought or sold, and calculate what its strike price is. Explain your answer.

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