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Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.20 has a premium of $0.017
Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.20 has a premium of $0.017 per unit. A euro put option has a premium of $0.010 per unit. Some possible euro values at option expiration are shown in the table below. a. Complete the worksheet and determine the net profit per unit to Reska, Inc., for each possible future spot rate. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Round your answers to three decimal places. $0.90 Call Put $ Net $ Value of Euro at Option Expiration $1.05 $1.50 $ $ $2.00 b. Determine the break-even points of the long straddle. What are the break-even points of a short straddle using these options? Round your answers to three decimal places. Lower break-even point (long straddle): $ Higher break-even point (long straddle): $ Lower break-even point (short straddle): $ Higher break-even point (short straddle): $
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