Melissa Simmons is the chief investment officer of a hedge fund specializing in options trading. She is currently back$-$testing various option trading strategies that will allow her to profit from large fluctuations$$either up or down$$in a stock's price. An example of such typical trading strategy is straddle strategy that involves the combination of a long call and a long put with an identical strike price and time to maturity. She is considering the following pricing information on securities associated with Friendwork, a new Internet start$-$up hosting a leading online social network:

Friendwork stock: $$100$

Call option with an exercise price of $$100$ expiring in one year: $$10$

Put option with an exercise price of $$100$ expiring in one year: $$8$

Using the above information on Friendwork, choose the correct graph showing the net profit$/$loss position at maturity for the straddle strategy.

The correct graph is

$-$Select$-$

$.$

A$.$

B$.$

C$.$

D$.$

What are the breakeven points? Round your answers to the nearest dollar.

The first breakeven point: $

The second breakeven point: $

Melissa's colleague proposes another lower$-$cost option strategy that would profit from a large fluctuation in Friendwork's stock price:

Long call option with an exercise price of $$114$ expiring in one year: $$7$

Long put option with an exercise price of $$86$ expiring in one year: $$6$

Similar to Part a$,$ choose the correct graph showing the net profit$/$loss position for the above alternative option strategy.

The correct graph is

$-$Select$-$

$.$

A$.$

B$.$

C$.$

D$.$

What are the breakeven points? Round your answers to the nearest dollar.

The first breakeven point: $

The second breakeven point: $