The common stock of the a Corporation has been trading in a narrow range around $40 per share for months, and you believe it is going to stay in that range for the next 3 months. The price of a 3-month put option with an exercise price of $40 is $3, and a call with the same expiration date and exercise price sells for $4. Answer the following questions:

1. What strategy would you like to use here?

2. Explain why you choose this particular strategy, its payoff and profits.