1. Construct a synthetic position providing full information on combined payoff and profit for all levels of open market / spot prices to expire in 3 months. The nominal annual interest rate is 8% and the current spot price for the stock is $40.
2. What is this position called? (Graph the position for visualization)
3. Identify its purpose arbitrage, hedge, or speculation.

Your position includes the following items buy a stock and buy a put; sell two calls and buy one call.

Stock: The price of the stock varies with the open market cash prices, in increments of $5 with a range between $20,$25,$30..and $60.

Buy Put: strike $35; Premium $0.44

Write two calls: strike for both $40; Premium for each is $2.78

Buy call: strike $45; Premium $0.97