Suppose an investor is currently holding a large position in Moderna Inc. (MRNA), whichis currently selling at $147.89. The investor wants to place a lower bound at a price of$100. In order to do so, he consults the premium of options written on MRNA. He finds thefollowing options that might help him get his objective:


December put option with strike $100 and premium $0.15 per share.
December put option with strike $120 and premium $0.48 per share.
Call option with strike $100 and premium $48.38 per share.
Call option with strike $145 and premium $10.48 per share.


a) Construct a strategy with MRNA and put OR call (just one type of option) that willguarantee the lower bound. Calculate the pay-off table, and graph such payoff at expiration.

b) Suppose the investors consider the strategy in a) too expensive, how would he reduce thecost of the strategy using call options? Again do the table and the graph. What would be thecost of the complete strategy?