Strike Jul Aug 160 165 170 Calls 6.00 2.70 0.80 Oct 8.10 11.10 5.25 8.10 3.25 6.00 Puts Jul Aug 0.75 2.40 5.75 2.75 4.75 7.50 Oct 4.50 6.75 9.00 Construct a long straddle using the October 165 options. Hold until the options expire. Determine the profits and graph the results. Identify the breakeven stock prices at expiration and the minimum profit.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Strike Jul
160
165
170
6.00
2.70
0.80
Calls
Aug
8.10
5.25
3.25
Oct Jul
11.10 0.7
8.10
2.40
6.00
5.75
Puts
Aug
2.75
4.75
7.50
Oct
4.50
6.75
9.00
Construct a long straddle using the October 165 options. Hold until the options
expire. Determine the profits and graph the results. Identify the breakeven stock
prices at expiration and the minimum profit.
Transcribed Image Text:Strike Jul 160 165 170 6.00 2.70 0.80 Calls Aug 8.10 5.25 3.25 Oct Jul 11.10 0.7 8.10 2.40 6.00 5.75 Puts Aug 2.75 4.75 7.50 Oct 4.50 6.75 9.00 Construct a long straddle using the October 165 options. Hold until the options expire. Determine the profits and graph the results. Identify the breakeven stock prices at expiration and the minimum profit.
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