The current price of a non-dividend paying stock is 40 and the continuously compounded risk-free interest rate is 4%. The following table gives call and put option premiums for three-month European-style options of various exercise prices.

Exercise price	Call Premium	Put premium
35	5.75	0.40
40	2.29	1.90
45	0.50	5.05

A trader interested in speculating on volatility is considering two investment strategies. The first is a long 40-strike straddle. The second is a long strangle consisting of a long put option at strike 35, and a long call option at strike 45.

Determine the range of stock prices (S_T) in 3 months for which the strangle outperforms the straddle.

Select one:

The strangle never outperforms the straddle.

35.90 < S_T < 44.10

34.10 < S_T < 45.90

The strangle always outperforms the straddle.

36.71 < S_T < 43.29