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Sara bought a straddle on Brent with the following characteristics: exercise price = $5, premium of call = $1, and the premium of put is

Sara bought a straddle on Brent with the following characteristics: exercise price = $5, premium of call = $1, and the premium of put is $1.50. Which of the following is TRUE if at this moment the price of Brent is $5.50 per share?

a.

Both the call and the put are out-of-the-money

b.

The call is out-of-the-money and the put is in-the-money

c.

Both the call and the put are in-the-money

d.

The call is in-the-money and the put is out-of-the-money

e.

The call is in-the-money and the put is at-the-money

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