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2. (11%) Given the information of the stock and stock options for Wal-Mart Stores Inc., a trading strategy is constructed by buying 3 calls at
2. (11%) Given the information of the stock and stock options for Wal-Mart Stores Inc., a trading strategy is constructed by buying 3 calls at strike price of $95 and buying 2 puts at strike price of $95. Please answer the following questions. Bid Ask Close Stock $101.50 $102.00 $101.75 $8.55 $8.80 $8.75 $3.50 $3.75 $3.70 Call (X=$95), T=0.5 year Call (X=$100), T=0.5 year Put (X=$95), T=0.5 year Put (X=$100), T=0.5 year $0.22 $0.28 $0.28 $1.14 $1.12 $1.08 (1) (6%) Please show the payoff and profits of the strategy if the stock price on the expiration date is $80, $90, $100, $110, or $120. (2) (5%) Please plot the profits of the strategy when the stock price on the expiration date is between $80 and $120
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