b. A trader believes that the KLCI market will fall in the future. Assuming in July the KLCI was trading at 1250. The trader bought the September KLCI put option at an exercise price of 1260 and a premium of 50 points. A month before the expiry date the KLCI dropped to 1110. As he waited the market to fall, the luck was not on his side, on the expiry date the market was still rising at 1280. Required: i. Prepare the pay-off diagram for the put option and show the break-even point if he took action on price at 1110. (2 marks) ii. Calculate his current position if he did not take his action in (i) above. (2 marks)