2. In April, shares of Bank of America are trading for $13.86. Bank of America 14 call options with June expiration are trading for $0.44/share. Bank of America 14 put options with June expiration are trading for $0.56/share. Consider a long straddle on Bank of America (long position in the 14 call, and long position in the 14 put). Remember that each option covers 100 shares. a. What is the initial net cashflow at the time of entering the option position? Clearly indicate if this is a cash inflow or cash outflow. b. Provide a Profit/Loss table showing the profit/loss of each option by itself, as well as the net profit/loss from the overall strategy. Include $10, $12, $14, and $16 as spot prices at expiration Spot @expiration $10 $12 $14 $16 P/L Long 14 Call $44.00 P/L Long 14 Put $344.00 Net P/L $300.00 C. Draw the profit/loss graph for the option position by plotting the profit/loss of the overall strategy on the y-axis at the potential ending spot prices provided on the x-axis Net profit/loss 5000.00 S500.00 $ 600.00 S800.00 $200.00 S100.00 50.00 S00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $100.00 $200.00 d. Determine the break-even spot price(s) of the option position. e. In a few sentences. Describe the overall strategy. When does the strategy lead to profits? What are the risks? What is the upside