Question: PROBLEM 7.2 A call option with an exercise price *40 is available at a premium of 3. A put with same maturity and exercise price

PROBLEM 7.2 A call option with an exercise price *40 is available at a premium of 3. A put with same maturity and exercise price can be purchased at a premium of *2. If you create a straddle, show the pay-off from it. When would the straddle result in loss?

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