The current price of one share of XYZ stock is 56.50. A long straddle (one long call 

and one long put) on the stock with a strike price of K and one year to expiration has 

a total cost of 12.00.

The straddle has two breakeven points. The upper breakeven point occurs when the 

ending stock price is 72.50.

The interest rate is 4.08%.

a.    Determine the lower breakeven point.

b.   Determine the maximum profit.

c.    Determine the minimum profit. 

d.   Which option has the higher premium (and why), the call or the put?