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Tommy Brown is an equity analyst focusing on healthcare and biotech industries. Recently, he believes that the share price of TTH, a biotech firm, will

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Tommy Brown is an equity analyst focusing on healthcare and biotech industries. Recently, he believes that the share price of TTH, a biotech firm, will be significantly influences by the outcome of US food and drug administration approval on its new drugs. If the application is successful, Tommy believes that TTH's share price will would increase sharply. If the application is unsuccessful, he believes that TTH's share price would fall significantly. Tommy wants to profit from his beliefs by implementing a straddle. He collects the following information Current share price of TTH $10.60 Risk free rate 1.3% Price of 30-day call option with strike price 11.50 is $1.2 Price of 30-day put option with strike price 11.50 is $1.5 A B Calculate the profit per share on the straddle if TTH's application is successful and TTH's share price doubles. Calculate two share prices of TTH at which breakeven for straddle occurs

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