Option Strategy Analysis
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Firm A is likely to be the target in a takeover attempt by Firm B. The stock price is likely to rise over the next few weeks as the takeover progresses, but if it fails, the stock price of A is likely to fall even more than the rise. What option strategy might exploit this information?
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Solution Summary
This solution discusses the ideal stock option strategy based on the given hypothetical situation.
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Here there is an uncertainty as to whether the stock price will either go up or go down. ...
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- MBA, Indian Institute of Finance
- Bsc, Madras University
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