3. (20 points) A portfolio consists of a number of European call contracts, all on the same asset and with the same expiration. The strike prices for these calls are 3,6, and 9. Draw the payoff diagram for this portfolio below, and on the next page work out how many calls of each type you must hold to make the portfolio, given that the payoff for the portfolio at various prices is given as follows. You may indicate that a call has been written by stating that the portfolio contains a negative number of that contract. Price Payoff Calls held 0 0 3 0 6 18 9 6 12 6 3. (20 points) A portfolio consists of a number of European call contracts, all on the same asset and with the same expiration. The strike prices for these calls are 3,6, and 9. Draw the payoff diagram for this portfolio below, and on the next page work out how many calls of each type you must hold to make the portfolio, given that the payoff for the portfolio at various prices is given as follows. You may indicate that a call has been written by stating that the portfolio contains a negative number of that contract. Price Payoff Calls held 0 0 3 0 6 18 9 6 12 6