SHOW YOUR WORK The Company has many contracts denominated in sucres. Each option contract insures the currency exchange rate between 100,000 sucres and the USD. The Company hedges against adverse exchange rate movements by entering a long straddle position (long call and long put) on the sucre. The quotes (in U.S. cents) on option contracts list the following:strike= 146.70 centscall last price= 1.45 centsput last price= 0.70 centsWhich statement about the straddle is most accurate?

a. The initial cost of entering the straddle is $2150

b. When price of the sucre at expiry is less than $1.4455 then payoff on the put makes the straddle profitable.

c. When price of the sucre at expiry is greater than $1.34 then payoff on the call makes the straddle profitable.

d. Two choices, A and B, are correcte. The three A-B-C choices are all correct