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You establish a straddle on Walmart using September call and put options with a strike price of $97. The call premium is $7.85 and the put premium is $8.60.   Required: a. What is the most you can lose on this position? (Input the amount as positive value. Round your answer to 2 decimal places.)     b. What will be your profit or loss if Walmart is selling for $98 in September? (Input the amount as positive value. Round your answer to 2 decimal places.)     c-1. What is the Break-even price for lower bound? (Round your answer to 2 decimal places.)   c-2. What is the Break-even price for upper bound? (Round your answer to 2 decimal places.)

You establish a straddle on Walmart using September call and put options with a strike price of $97. The call premium is $7.85 and the put premium is $8.60.   Required: a. What is the most you can lose on this position? (Input the amount as positive value. Round your answer to 2 decimal places.)     b. What will be your profit or loss if Walmart is selling for $98 in September? (Input the amount as positive value. Round your answer to 2 decimal places.)     c-1. What is the Break-even price for lower bound? (Round your answer to 2 decimal places.)   c-2. What is the Break-even price for upper bound? (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You establish a straddle on Walmart using September call and put options with a strike price of $97. The call premium is $7.85 and the put premium is $8.60.
 

Required:

a. What is the most you can lose on this position? (Input the amount as positive value. Round your answer to 2 decimal places.)

 


 

b. What will be your profit or loss if Walmart is selling for $98 in September? (Input the amount as positive value. Round your answer to 2 decimal places.)

 


 


c-1. What is the Break-even price for lower bound? (Round your answer to 2 decimal places.)

 



c-2. What is the Break-even price for upper bound? (Round your answer to 2 decimal places.)

 
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