Construct profit diagrams or profit tables 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 $150 so that prot diagrams/ tables between $100 and $200 (in $10 increments) are appropriate. Also assume that "at the money" puts and calls cost $15 each. (As usual, the profit calculations ignore dividends and interest.)

1.) An investor already owns IBM (at a price of 150) and wants to protect against price declines but wants to retain upside if prices rise. Only one transaction is permitted here.

2.) Suppose the NYSE suspended trading in IBM pending a news announcement. You want to sell IBM before the announcement and options trading in IBM continues uninterrupted on the CBOE. How do you neutralize your exposure to stock price changes by trading options? (you can use the insights from the put-call parity)