Suppose the DJIA stands at 24,300. You want to set up a long straddle by purchasing 100 calls and an equal number of puts on the index, both of which expire in three months and have a strike of 243. The put price is listed at $4.30 and the call sells for $5.30 a. What will it cost you to set up the straddle, and how much profit (or loss) do you stand to make if the market falls by 800 points by the expiration dates on the options? What if it goes up by 800 points by expiration? What if it stays at 24,300? b. Repeat part a, but this time assume that you set up a short straddle by selling/writing 100 Oct 243 puts and calls. c. What do you think of the use of option straddles as an investment strategy? What are the risks, and what are the rewards? CODE a. To set up the long straddle, it will cost $ 96,000. (Round to the nearest dollar. Enter a positive number for the cost.) If the market on the long straddle falls by 800 points by the expiration dates on the options, the profit (or loss) is $ (Round to the nearest dollar. Enter a positive number for a profit and a negative number for a loss.)