The price of a stock is $60. The price of a one-year European put option on the stock with a strike price of $45 is quoted as $10.5 and the price of a one-year European call option on the stock with a strike price of $75 is quoted as $7.5. Suppose that an investor buys 100 shares of stock, shorts 100 shares of call options, and buys 100 shares of put options.

(a) Show the profit (loss) table for the combined position (long stock, long put, and short call) if ST $75.

(b) Draw the profit (loss) graph for (a), illustrating how the investors profit or loss varies with the stock price over the next year.