The put option of Joe Inc. is currently trading at $2.50 while the call option premium is $7.50. Both the put and the call have an exercise price of $25. Joe Inc. stock is currently trading at $32.25 and the risk free rate is 3%. The options will expire in one month.

Investigate the profit/loss possibilities at options expiration for the protective put portfolio vs. the long call position. For example, if the stock price is $14 when options expire, stock's profit/loss will be $l4 - $32.25 = - $18.25 (i.e., a loss), long put option's profit/loss will be $25 - $14 - $2.5 = $8.5 (i.e., a profit), and long call option's profit/loss will be $0 - $7.5 = - $7.5 (i.e., a loss).

Thus, a protective-put portfolio of long stock and long put will incur portfolio's profit/loss of - $18.25 + $8.5 = - $9.75, while the long call position will suffer - $7.5 loss. These profits/losses are entered in the following table for the Stock Price = 14.00.

1. Complete the following table for different stock prices other than $14. (In this exercise, ignore the interest costs on capital.)

Stock Price When Options Expire	Without Considering Interst Costs
	Protective Put Portfolio
$	Stock Profit/Loss	Put Option Profit/Loss	Portfolio Proft/Loss	Call Option Profit/Loss
14.00	-18.25	8.5	-9.75	-7.5
17.10
20.30
23.50
25.00 (Strike)
26.70
29.90
32.50
35.70
38.90
42.00

2. What is the maximum loss for the protective put strategy (i.e., holding a portfolio of long stock and long put)?

3. What is the maximum loss for the long call?

4.What is the difference in payoff between the protective put strategy and the long call for each of the possible stock prices at options expiration?