Question 2: 15 a new asset management boutique offering the general public the opportunity vest in some derivative instruments such as stock options, as well as a broad range of mal stocks. As the specialist in European options, you have been given the task to construct a straddle strategy on a specific stock called Jersey Inc. with the following contract specifications: Expiry Premium Strike Price Call/Put - March 2020 $45 March 2020 $55 March 2020 $45 March 2020 $57 $120 $135 $120 $125 Call Call Put Put (a) Construct a long straddle strategy, showing clearly the long strategy Profit and Loss diagram. Part of your working should include a table with Jersey's stock prices and respective profit and losses. Ignore the risk free rate in your calculations. (b) What are the breakeven points of this option strategy? (c) What is the maximum profit? (d) Would you exercise a short straddle if the stock price rises to $2002 Explain your answer and clearly show any resulting profit or loss. (e) Why would you recommend a long straddle as opposed to investing outright in the stock market at a price of $120? Explain your