Consider a portfolio consisting of two European-style options.

1. you write a put option with an exercise of $30; and,
2. buy a put option on the same stock with the same expiration date with an exercise price $35.

Required: Fill in the gaps with your answers. For a and b, write a number at each gap. For c, select your investment activity: buy or sell at each gap.

1. At the options expiration date, the maximum payoff of your options portfolio is ($ ).
2. At the options expiration date when the stock price is $32, the payoff of your options portfolio is ($ )
3. Ignoring a and b, to replicate a short position in a put option on an underlying stock, you should ( ) its call option, ( ) underlying stock, and ( ) treasury bond.