1. (25 points) Right now, UPS stock is trading at $169.50 per share. A Euro- pean put option on UPS stock with a strike price of $165 expiring in one month is trading at $6.71. (a) What is the intrinsic value of this put option? (b) What is the time value of this put option? (c) For what range of UPS stock price Sr will the put option be exercised? (d) Suppose, you short (or write) this put option on 100 shares. For what range of UPS stock price Sy will you make a positive profit (not payoff) on your short put position? (e) On the graph below, sketch how your profit (not payoff) on the short put position varies with the underlying share price at the time of op- tion expiration. Please label the numerical values of both vertical and horizontal intercepts. Profit 0 stock price at T