Hedging Short Share Position Using a Short Put

Frank short sells 1,000 A shares at a price of $26.00 and decides to construct a

hedge by writing an equal number of put options (Short) , with an exercise price of $27.00 and a premium of $1.40 per option.

Ignoring the time difference between the purchase of the option and its expiry:

i) construct a clearly labelled diagram showing the expiry profit as a function of share-price, from the hedged position.

ii) calculate the profit for the expiry share-prices of $25.00 and $28.00.