In January 2022, Company Monash's stock is traded at $150. The following table provides the premiums of March, April, and May maturity options with different strike prices on Company Monash's stock. Based on the current market condition, you would like to construct the following option trading strategy: Long Strap using May maturity options.

(Required: In parts b-e and h, use the values of strike and premium of the option(s) that you select in part a)

	Calls			Puts
Strike	March	April	May	March	April	May
145	6	9	12	0.5	3	4
150	3	7.5	9.5	1.5	4.5	6
155	1.5	6	8.5	3	7.5	9.5

(a)            Describe how to construct the strategy. Which call and/or put is (are) used?

(b)           Show the net payoff function of the strategy.

(c)            Fill in the net payoff table. (Required: show the net payoff of each option used to construct the strategy and the overall net payoff of the strategy)

(d)           What are the maximal profit and the maximal loss of the strategy? (Required: show how to calculate the value(s) if it is applicable)

(e)            When does the strategy make a profit? (Required: show how to calculate the value(s) if it is applicable)

(f)            When you construct the strategy, what is your expectation of Company Monash's stock price movement?

(g)           After constructing the above trading strategy, the share price is not changed. However, your expectation is changed, and you would like to construct a long Straddle instead. Describe a shortcut way to construct the new strategy by adjusting the existing trading strategy. Which call and/or put is (are) used? Explain.

(h)           Suppose you constructed a long Strip rather than a long Strap in January 2022. Explain when the new strategy leads you to a worse outcome than the original one? If the stock price changes to 170, how much more/less profit do you make for the new strategy than the original one? (Required: show how to calculate the value(s)