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Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.10 has a premium of $0.022 per
Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.10 has a premium of $0.022 per unit. A euro put option has a premium of $0.015 per unit. a. Choose the correct contingency graph for a long euro straddle. A B Net Profit per Unit Net Profit per Unit $0.037 $0.037 $1.063 $1.174 $1.063 $1.137 $1.100 $1.137 $1.100 - $1.063 - $1063 Future Spot Rate Future Spot Rate Net Profit per Unit D Net Profit per Unit $1.063 $1.063 $1.063 $1.174 $1.063 $1.137 $1.100 $1.137 $1.100 1 SO 03Z 50.032 Future Spot Rate Future Spot Rate The correct graph is -Select- b. Choose the correct contingency graph for a short euro straddle. A B Net Profit per Unit Net Profit per Unit $1.063 $0.037 $1.063 $1.174 $1.063 1 $1.174 $1.100 $1.137 $1.100 $1.137 50.037 - $1.063 Future Spot Rate Future Spot Rate D Net Profit per Unit |Net Profit per Unit $1.063 $0.037 $1.063 $1.137 $1.063 $1.137 $1.100 $1.100 1 50.037 - $1.063 Future Spot Rate Future Spot Rate The correct graph is -Select
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