The stock price of Alphabet Inc is $1800/share. Assume European options are available on the stock of Alphabet Inc. An European call expiring in 3 months with strike price of $1700 is available for $170 and An European put with the same strike price and same expiration date is also available for $60.

(a) How can you construct a straddle with the above European call and European put ? (1 points)

(b) What is the profit function of this straddle on the expiration date and draw a diagram of this profit function against the stock price on the expiration date? ( 5 points )

(c) For what range of stock price, the straddle will lead to a loss on the expiration date ? (4 points)