Consider the following portfolio: you buy a call option with an exercise price of $60 and premium of $3 and buy a put option on the same stock with the same expiration date and an exercise price of $70 and premium of $2.

a. Write out the payoffs and profits for the strategy at expiration for three different scenarios (S_T < 60, 60 S_T 70, and S_T > 70).

b. Draw the payoff graph for this strategy.