Consider the situation of an investor who sells a European put option with a strike price of $66 to sell 100 shares of a certain stock. The current stock price is $65, the expiration date of the option is 4 months, and the price of the option to purchase 1 share is $3.

(a)Use graph to show a profit from selling a European put option. Cleary indicate the horizontal, vertical axes as well as the strike price value and option price on the graph.

(b) Suppose that price at time of expiration is $70 per share. Calculate the amount of initial investment, the payoff and the total profit.