What is barry total profit or loss

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Barry Egan is a currency speculator. Barry believes that the Japanese yen will fluctuate widely against the U.S. dollar in the coming month. Currently, one-month call options on Japanese yen (¥) are available with a strike price of $0.0088 and a premium of $0.0006 per unit. One-month put options on Japanese yen are available with a strike price of $0.0083 and a premium of $0.0004 per unit. One option contract on Japanese yen contains ¥6.25 million.

a. Assume Barry decides to construct a strangle in yen. What are the break-even points of this strangle? Round your answers to four decimal places.

Lower break-even point: $

Upper break-even point: $

b.What is Barry's total profit or loss if the value of the yen in one month is $0.0064? Use a minus sign to enter loss values, if any. Round your answer to the nearest dollar.

c.What is Barry's total profit or loss if the value of the yen in one month is $0.0093? Use a minus sign to enter loss values, if any. Round your answer to the nearest dollar.

Reference no: EM132678424

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