Consider that you have the following $3$ options available at time t$=0$:

Call Option $1$ Call Option $2$ Call Option $3$

Type European European European

Strike Price $95$ USD $100$ USD $105$ USD

Option Price $1$ USD $2$ USD $4$ USD

Time to maturity $1$ year $1$ year $1$ year

Consider the following strategy:

$$ Sell one unit of call option $1$

$$ Sell one unit of call option $3$

$$ Buy two units of call option $2$

You are requested to:

a$)$ Present the payoff of this strategy when the options mature.

b$)$ Present a graphic$/$plot $($with sufficient detail$)$ of the strategy$$s payoff at

maturity.

c$)$ Describe for which market condition this trading strategy could be appropriate.