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You buy a straddle, which means you purchase a put and a call with the same strike price. The put price is $3.30 and the
You buy a straddle, which means you purchase a put and a call with the same strike price. The put price is $3.30 and the call price is $5.40. Assume the strike price is $125. |
a. | What are the expiration date profits to this position for stock prices of $115, $120, $125, $130, and $135? (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round your "Total profit" answers to 2 decimal places. Omit the "$" sign in your response.) |
Stock Price | Call Payoff | Put Payoff | Total Payoff | Total Profit | ||||
$115 | $ | $ | $ | $ | ||||
$120 | $ | $ | $ | $ | ||||
$125 | $ | $ | $ | $ | ||||
$130 | $ | $ | $ | $ | ||||
$135 | $ | $ | $ | $ | ||||
b. | What are the break-even stock prices? (Round your answers to 2 decimal places. Omit the "$" sign in your response.) |
High | Low | |
Break-even prices | $ | $ |
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