Consider the following option portfolio. You write a July 2009 expiration call option on IBM with exercise price of $100. You also write a July 2009 expiration put option on IBM with exercise price of $95.

1. If IBM stock is $97 on the expiration date (third Friday of July 2009), what is the total payoff on the two options in your portfolio?

2.

If the July 2009 expiration call option price is $7.35 and the July 2009 expiration put option price is $9.00. And the IBM stock is $105 on the expiration date (third Friday of July 2009), what is the total profit/loss on the two options in your portfolio?