You are long both a call option and a put option on Hewlett-Packard stock with the same expiration date. The exercise price of the call option is $60; the exercise price of the put option is $40.

a. Plot the payoff as a function of HP stock price of the combination at expiration.

b. What is this combination called?

c. When would you (as an investor) enter such a combination? That is, what do you expect about the stock price in the future? Explain briefly