Question: 1. a. Illustrate how strangle and straddle option combinations are constructed. (40 marks) b. Compare, using a numerical example, the range of potential payoffs and

1. a. Illustrate how strangle and straddle option combinations are constructed. (40 marks) b. Compare, using a numerical example, the range of potential payoffs and profits from a strangle and a straddle written on the same underlying asset. (60 marks)

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