An investor purchases a call option with a strike price of R$65$ and a premium of R$2,50.$ The investor simultaneously writes a call option with an exercise price of R$78$ and a premium of R$1,20.$ The call and put options have the same expiry date and same underlying asset which currently trades at R$68$ per share.

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Required:

$3\mathrm{.}1$ Identify the name of the option strategy that the investor has employed, and discuss the investor$$s expectations when using this strategy.$(3$ marks$)$

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$3\mathrm{.}2$ Determine the payoff and profit on this strategy if the share price moves to$(12$ marks$)$:

$($i$)$R $60$

$($ii$)$R $69$

$($iii$)$R $83$