Question: 1 ) Suppose that a firm expects a very important announcement today. The outcome of that announcement is unclear ( positive or negative each with

1) Suppose that a firm expects a very important announcement today. The outcome of that announcement is unclear (positive or negative each with 50% probability). The current price of firms stock is 50. An investor decides to employ a straddle strategy by buying a call with K =50 by paying 2/ share and also buying a put paying 2.5/share. If these options are European , what will be the investors profit or loss at the end of maturity in each of the possible cases below
A) If price is 52 b) If Price is 58 c) If price is 45

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