Question 2. Tom, a manager at Blue Tech, Inc. (BTI), received 10,000 shares of company stock as a part of his compensation package. The stock currently sells at $40 a share. Tom would like to defer selling the stock until next year. In January, he will need to sell all his holdings to provide for a down payment on his new house. If the value of his stock holdings falls below $350,000, his ability to come up with the necessary down payment would be jeopardized. On the other hand, if the stock value rises to $450,000, he would be able to maintain a small cash reserve even after making the down payment. Tom considers the following three investment strategies: 1. Strategy A is to write January call options on the BTI shares with strike price $45. These calls are currently selling for $3 each. 2. Strategy B is to buy January put options on BTI with strike price $35. These options also sell for $3 each. 3. Strategy C is to establish a zero-cost collar by buying the January puts and writing the January calls. Evaluate each of these strategies with respect to Tom's investment goals. Which strategy would you recommend? Justify your recommendation. (Total 12 Marks)