Problem

17. Firm A is likely to be the target in a takeover attempt by firm B. The stock price is...

17. Firm A is likely to be the target in a takeover attempt by firm B. The stock price is likely to rise over the next few weeks as the takeover progresses, but if it fails, the stock price of A is likely to fall even more than the rise. What option strategy might exploit this information?

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Solutions For Problems in Chapter 8