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Problem 5 (20 marks) Consider the following options, which have the same two-year maturity and are written on the same stock. The firm does not

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Problem 5 (20 marks) Consider the following options, which have the same two-year maturity and are written on the same stock. The firm does not pay dividends. Put option P1 has a strike price Xp1 = $50 Put option P2 has a strike price Xp2 = $100 Call option C1 has a strike price Xc1 = $100 Call option C2 has strike price Xc2 = $50 Your broker offers two trading strategies that can be derived from the options above. Strategy A: Long two puts P1 and long two calls C1 Strategy B: Long two calls C2 and long two puts P2 A. Which strategy would you choose if the two strategies have the same costs? Explain your

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