Problem 3 (25 points) Suppose that an investor purchases a share of stock A for $50 and a put option on stock A for $3 expiring after 1 year with a exercise price of $45. In addition, the investor writes a call option on same stock for $3 expiring after 1 year with a exercise price of $55. (a) List the possible stock ranges at expiration that give you different outcomes. (b) Construct a table of profits for this strategy using the stock ranges you listed in part (a). What is the maximum profit and loss (the minimum value of profit, it could be negative) for this strategy? Hint: Profit Payoff - Cost. = (c) Based on the table, draw the profit diagram for this strategy as a function of the stock price at expiration. Problem 3 (25 points) Suppose that an investor purchases a share of stock A for $50 and a put option on stock A for $3 expiring after 1 year with a exercise price of $45. In addition, the investor writes a call option on same stock for $3 expiring after 1 year with a exercise price of $55. (a) List the possible stock ranges at expiration that give you different outcomes. (b) Construct a table of profits for this strategy using the stock ranges you listed in part (a). What is the maximum profit and loss (the minimum value of profit, it could be negative) for this strategy? Hint: Profit Payoff - Cost. = (c) Based on the table, draw the profit diagram for this strategy as a function of the stock price at expiration