Explain. 13. and 14. (DOUBLE CREDIT – 2 POINTS) a. Where the left and right tic-marks are exercise prices 60 and 80, res

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answerhappygod
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Explain. 13. and 14. (DOUBLE CREDIT – 2 POINTS) a. Where the left and right tic-marks are exercise prices 60 and 80, res

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Explain. 13. and 14. (DOUBLE CREDIT – 2 POINTS) a. Where theleft and right tic-marks are exercise prices 60 and 80,respectively, explain how the “strangle” payoff above can becreated with a put and call. b. Suppose that the price variance ofthe underlying security rises. What happens to the payoffpattern from the point of view of a prospective purchaser of theput and call. Explain.
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