1. A collar is a widely-used options strategy. It involves a long put at a lower strike and a short call at a higher strike on the same underlying with the same maturity.
   1. Draw the gross payoff diagram for a 95/105 collar.
   2. Suppose a long position in a foreign currency (that is currently trading at Rs.100) is combined with a 95/105 collar. Assume the 95 put is trading at Rs.

0.95 and the 105 call is trading at Rs.1.40. Draw the gross and net payoff diagrams for this combined position.

Can you recreate this position using only call options? Explain