1. Construct payoff and profit tables on expiration to show what position in IBM puts, calls and/or underlying stock best expresses the investor's objectives described below. Assume IBM currently sells for $150 so that profit tables between $100 and $200 in $10 increments are appropriate. Also assume that at the money puts and calls cost $15 each. (As always, the profit tables ignore the time value of money.) (a) An investor wants upside potential if IBM increases but wants losses no greater than $15 if prices decline. (b) An investor wants to capture profits if IBM declines in price but wants a guaran- teed limited loss if prices increase. (c) An investor wants to capture profits if IBM declines in price and is ready to accept unlimited losses if prices increase. [2 answers are possible] (d) An investor wants to profit if IBM's upcoming earnings announcement is either unexpectedly good or disappointingly bad. (e) An investor already owns IBM (at a price of $150) and wants to protect against price declines but wants to retain upside if prices rise. Only one transaction is permitted here. (f) Suppose the NYSE suspended trading in IBM pending a news announcement. You want to sell IBM before the announcement and options trading in IBM continues uninterrupted on the CBOE. How do you do it? 1. Construct payoff and profit tables on expiration to show what position in IBM puts, calls and/or underlying stock best expresses the investor's objectives described below. Assume IBM currently sells for $150 so that profit tables between $100 and $200 in $10 increments are appropriate. Also assume that at the money puts and calls cost $15 each. (As always, the profit tables ignore the time value of money.) (a) An investor wants upside potential if IBM increases but wants losses no greater than $15 if prices decline. (b) An investor wants to capture profits if IBM declines in price but wants a guaran- teed limited loss if prices increase. (c) An investor wants to capture profits if IBM declines in price and is ready to accept unlimited losses if prices increase. [2 answers are possible] (d) An investor wants to profit if IBM's upcoming earnings announcement is either unexpectedly good or disappointingly bad. (e) An investor already owns IBM (at a price of $150) and wants to protect against price declines but wants to retain upside if prices rise. Only one transaction is permitted here. (f) Suppose the NYSE suspended trading in IBM pending a news announcement. You want to sell IBM before the announcement and options trading in IBM continues uninterrupted on the CBOE. How do you do it