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Unformatted text preview: b. What will be your profit or loss if Intel is selling for $58 in September? c. At what stock prices will you break even on the straddle? 11. The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past 3 months. You do not know whether it will go up or down, however. The current price of the stock is $100 per share, the price of a three month call option with an exercise price of $100 is $10, and a put with the same expiration date and exercise price costs $7. a. What would be a simple options strategy to exploit your conviction about the stock prices future movements? b. How far would the price have to move in either direction for you to make a profit on your initial investment?...
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- Spring '11