1) Recall that a straddle is formed by buying a call and put on the same asset with the same exercise

price and same option expiration while a strangle is a straddle-type strategy with different option strike

prices, specifically with Xc > Xp. Given the following quotations from November 23, 2011 for Turkcell

stock that trades at the NYSE and various options on Turkcell, answer the questions below.

urkcell stock, closing price = $ 12.03

Option expiration = January 20, 2012.

Call: Strike Price = 15, Closing price = 0.15

Call: Strike Price = 12.5, Closing price = 0.65

Put: Strike Price = 10, Closing price = 0.20

Put: Strike Price = 12.5, Closing price = 1.10

a) Determine the dollar payoffs and profits for the long straddle and the long strangle for the set of

closing price scenarios for Turkcell on January 20, 2012 given in the table below:

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Long straddle with X = Long strangle with X 15 and = 12.50 Xp-10 ST Payoff Profit Payoff Profit 8 10 12 14 24 Long straddle with X = Long strangle with X 15 and = 12.50 Xp-10 ST Payoff Profit Payoff Profit 8 10 12 14 24