Problem

Use the spreadsheet from the Excel Application boxes on spreads and straddles (available a...

Use the spreadsheet from the Excel Application boxes on spreads and straddles (available at www.mhhe.comlbkm;link to Chapter 15 material) to answer these questions.

a. Plot the payoff and profit diagrams to a straddle position with an exercise (strike) price of $130. Assume the options are priced as they are in the Excel Application.

b. Plot the payoff and profit diagrams to a spread position with exercise (strike) prices of $120 and $130. Assume the options are priced as they are in the Excel Application

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