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What is the pattern of pro?ts from the strangle

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A call option with an exercise price of K = 50 costs 2 euros. A put option with a strike price of K = 45 costs 3 euros. Assume 1 euro = R20.51.

a) Describe how a strangle can be constructed on these two options.

b) What is the pattern of pro?ts from the strangle?

Reference no: EM132531810

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