As a fan of snowmobiling, you have considered investing some of your portfolio in Polaris

Industries. Since Polaris has a large ? (1.5) and the level of uncertainty in the market is

high, you were interested in a lower risk way to invest in Polaris. A colleague

recommended you purchase a one year, zero-coupon T-bill with a face value of $1,000 and

short (sell) 10 puts on Polaris stock which have a strike price of $100 and a year to maturity.

The price of the T-bill is $980, the current price of Polaris stock is $85 per share, and the

price of a single put option on Polaris is $17.

(A) Graph the gross payoff to your portfolio as a function of Polaris Industries' stock

price next year. Be sure your graph is clearly and completely labeled.1