Draw a payoff diagram for each of the following portfolios. Note I want to see what the portfolio pays off, not just the payoffs of the individual securities. You can draw the individual payoff diagrams, but your answer should be a graph that has ONLY the portfolio payoff. a. Buy a put X = $50, sell a call X = $50, sell a bond FV = $50. b. Buy a put with X = $45 (cost is $9.20), sell a put with X = $40 (cost is $5.72), sell a put with X = $35 (cost is $3.02), buy a put with X = $30 (cost is $1.24). Draw the gross and net payoff diagram for this portfolio. Suppose the current stock price is $37.50.

Do you have an arbitrage opportunity? Why or why not? If you think there is an arbitrage opportunity, what would you do to exploit it?