Question about Investments

Say you purchased Alcoa at $15.00. Construct a protective put and covered call with strike prices at $15.00

a. Draw the profit graph, including the unhedged position.

b. Assume you are risk adverse and expect the spot price at expiration to be $20, would you choose the protective put, the covered call, or the remaining unhedged? Why?

c. Assume you are risk tolerant and expect the spot price at expiration to be $10, would you choose the protective put, the covered call, or remaining unhedged? Why?

ucoa Inc. (AA) NYSE c watchlist 15.13 0.26 (1.69%) Nasdaq Real Time Price Dptions iew By Expiration: Oct 14 INov t-IDec 14 Jan 15IApr 15I Jan 15IJan 17 ptions Expiring Saturday, December 20, 2014 Last Change Bud Ask volume open Strike Price 141 0000 5.33 0.00 5.05 520 Int Last Charge Bid Ato Volums open AA141220C000 12000 310 1000 AAS41220PO0010000 901 002 0.75 315 335 AA141220C00013000 2.20 1200 AASC1220PO0012000 0.10 000 0,13 020 0.42 2.34 2.50 100 1300 AA14 1220P 00013000 026 oss 027 032 141 1.66 0.24 1.60 1.69 1400 AAS 41220P 00014000 o se 008 053 osa 574 1A08 141 1.06 0.05 1.03 1.0E 70E 1.065 1500 AAS41220P00015000 ona 031 097 6381 141 10.65 0.07 0.61 65 1320 3757 1500 AAS41220PO0012000 1.52 010 1AT 159 200 20,330 14122 7000 0.4 A141 0.20 0.03 35 0.37 91 2879 17.00 AA141220PO0017000 227 0.20 218 235 249 0.03 0.19 021 1800 AAS41220PO0018000 300 300 320 10 12 ucoa Inc. (AA) NYSE c watchlist 15.13 0.26 (1.69%) Nasdaq Real Time Price Dptions iew By Expiration: Oct 14 INov t-IDec 14 Jan 15IApr 15I Jan 15IJan 17 ptions Expiring Saturday, December 20, 2014 Last Change Bud Ask volume open Strike Price 141 0000 5.33 0.00 5.05 520 Int Last Charge Bid Ato Volums open AA141220C000 12000 310 1000 AAS41220PO0010000 901 002 0.75 315 335 AA141220C00013000 2.20 1200 AASC1220PO0012000 0.10 000 0,13 020 0.42 2.34 2.50 100 1300 AA14 1220P 00013000 026 oss 027 032 141 1.66 0.24 1.60 1.69 1400 AAS 41220P 00014000 o se 008 053 osa 574 1A08 141 1.06 0.05 1.03 1.0E 70E 1.065 1500 AAS41220P00015000 ona 031 097 6381 141 10.65 0.07 0.61 65 1320 3757 1500 AAS41220PO0012000 1.52 010 1AT 159 200 20,330 14122 7000 0.4 A141 0.20 0.03 35 0.37 91 2879 17.00 AA141220PO0017000 227 0.20 218 235 249 0.03 0.19 021 1800 AAS41220PO0018000 300 300 320 10 12