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Recently, ABC Health announced that it was going to buy Walgreens. For weeks prior to the announcement, there had been speculation as to the merger.
Recently, ABC Health announced that it was going to buy Walgreens. For weeks prior to the announcement, there had been speculation as to the merger. If the merger went ahead, the price of Walgreens stock would soar. If the merger fell through, Walgreens's share price would decline significantly.
If an investor is uncertain as to whether the merger will happen, list and describe two option strategies where he or she could profit regardless of whether the merger took place or not. Explain.
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