Consider an option strategy where you buy a call option with strike price 50, and sell a call option with strike price 60. In addition, buy a put option at strike price 60, and sell a put option at strike price 50. The maturity for all the options is 1 year.

Plot the payoff profile for this strategy in an excel spreadsheet.

What is the strategy with the two calls commonly referred to as? What is the strategy with the two puts commonly referred to as?

If the expected return on the underlying stock for the 1-year period is 12%, and the riskfree rate for the one-year period is 6%, what return do you think investors expect from this strategy, and why?