Question ci The following European options of Woodtea Company are available in the market: Options Call No. 1 Call No. 2 Put No. 1 Put No. 2 Exercise Price $55 $60 $55 $60 Option Price $7 $4 $2 $3 Expiration Date 30 Jun 2020 30 Jun 2020 30 Jun 2020 30 Jun 2020 Wendy expects stock price of Woodtea will decrease in the future due to widespread of COVID-19 and is considering the following option strategies: (1) Long one Put No. 2 (2) Short one Call No. 1 (3) Short one Call No. 1 and long one Call No. 2 Required: (a) Calculate the following figures related to the above option strategies. (i) Net profit when (ii) Net profit when (iii) Breakeven stock price is $52 stock price is $65 price at expiration at expiration Strategy 1 Strategy 2 Strategy 3 (9 marks) (b) Without any calculations, (i) identify and explain briefly which of the above strategies is the most appropriate to Wendy (2 marks) (ii) explain why the remaining strategies are inferior to the strategy stated in (b)(i). (4 marks)