Question: You have the following profit function: max (ST - $1.25, 0) + max ($1.25 - St, O) + $0.08. Which of the following is false?

You have the following profit function: max (ST - $1.25, 0)

You have the following profit function: max (ST - $1.25, 0) + max ($1.25 - St, O) + $0.08. Which of the following is false? This is a profit function of a strangle. The premiums paid to create this strategy is $0.08. If the spot price is $1.35, the profit of this strategy is $0.02. The maximum loss that we can have with this strategy is $0.08

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