2. Suppose you short an index valued for $1000. To protect yourself from value increase you buy (a) Draw a time table for the shorted index, and the purchased call, and the combined b) Draw profit diagram for the combined position. What is the name of the combined (c) Verify that you obtain the same payoff diagram and profit diagram by purchasing a a 1000-strike 1-year call with a premium of $93.81. You are given r-2% annual effective. position position? 1000-strike put option with T-1 year to expiration and premium $74.20, coupled with borrowing S980.39. d) Verify the result using put-call parity. 2. Suppose you short an index valued for $1000. To protect yourself from value increase you buy (a) Draw a time table for the shorted index, and the purchased call, and the combined b) Draw profit diagram for the combined position. What is the name of the combined (c) Verify that you obtain the same payoff diagram and profit diagram by purchasing a a 1000-strike 1-year call with a premium of $93.81. You are given r-2% annual effective. position position? 1000-strike put option with T-1 year to expiration and premium $74.20, coupled with borrowing S980.39. d) Verify the result using put-call parity