You enter into the following option positions with firm ABC Inc, which expire in one year : (i) Buy a call option with an exercise price of $50. The premium is $5. (ii) Sell a put option with an exercise price of $50. The premium is $10. a) You believe that one year from now the price per share will be $60.00. Calculate your expected profit or loss, including the premium paid or received from each of the investments above. b) Find the current market price of this stock. Assume that the risk-free annual interest rate is 3%. (c) Instead of the portfolio held in (a), you purchase one call and you purchase one put option (with strike price \$50). Type X in the highlighted cell that corresponds to the gross payoff from this new portfolio There are 5 options, be sure to look at all of them by scrolling Answers marking more than 1 diagram will be marked as incorrect Payoff Diagram Choice A 150 50 0 50 Payoff Diagram Choice B 150 50 Diagram B Diagram C Payoff Diagram Choice C 150 50 0 -50 Value of Stock at Expiration Payoff Diagram Choice D 150 50 Diagram D Diagram E Diagram E Value of Stock at Expiration Value of Stock at Expiration Payoff Diagram Choice E 150 100 50 50 Value of Stock at Expiration DO NOT DELETE Value of S Payoff Diagram Choice A \begin{tabular}{|r|r|r|} \hline 0 & 0 & \\ \hline 50 & 50 & \\ \hline 100 & 100 \\ \hline 150 & 150 & \\ \hline \end{tabular} Value of S Payoff Diagram Choice B \begin{tabular}{|r|r|} \hline 0 & 50 \\ \hline 50 & 50 \\ \hline 100 & 100 \\ \hline 150 & 150 \\ \hline \end{tabular} Value of S Payoff Diagram Choice C \begin{tabular}{|r|r|r|} \hline 0 & 50 \\ \hline 50 & 0 \\ \hline 100 & 50 \\ \hline 150 & 100 & \\ \hline \end{tabular} Value of S Payoff Diagram Choice D \begin{tabular}{|r|r|} \hline 0 & 50 \\ \hline 50 & 100 \\ \hline 100 & 150 \\ \hline 150 & 200 \\ \hline \end{tabular} Value of S Payoff Diagram Choice E \begin{tabular}{|r|r|} \hline 0 & 50 \\ \hline 50 & 100 \\ \hline 100 & 100 \\ \hline 150 & 100 \\ \hline \end{tabular}