Construct payoff tables or payoff diagrams on expiration to show what position in IBM puts, calls and/or underlying stock best expresses the investor's objectives described below. Assume IBM currently sells for $100. Make appropriate assumptions about the strike prices of options in each case. Ignore the cost of options.

a. An investor wants to profit if IBM's upcoming earnings announcement is either unexpectedly good or disappointingly bad.

b. An investor wants to capture profits if IBM declines in price but wants a guaranteed limited loss if prices increase.

c. An investor wants the position to be at least worth $75. Further the investor believes that the IBM stock price will go up but will at most reach $140.