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QUESTION QUESTION 1 OF 4 Assume the following options are currently available for dollars: premium strike price Call option 1 0.04/5 0.85/$ Call option 2

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QUESTION QUESTION 1 OF 4 Assume the following options are currently available for dollars: premium strike price Call option 1 0.04/5 0.85/$ Call option 2 0.03/$ 0.87/5 Put option 1 0.03/5 0.85/5 Put option 2 0.02/$ 0.83/$ Based on the current volatility in the market, you expect that the dollar moves significantly in one way or the other. Required: a. Which option strategy (or strategies) can make you profit? Why? (4 points) b. By constructing a table, calculate net profit (loss) for your strategy by using two of the quoted options and by using these possible spot rates in the future: 0.75/5, 0.80/5, 0.85/5, 0.90/5, and 0.95/5 (15 points) c. Determine the break-even points for your strategy. (6 points)

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