You want to invest in the stock market. You decide upon MicroAppleBook, a tech company that today is trading at 1000$ per share. You are, however, broke and cannot afford to buy a share. Your strategy is to short (sell) 100 European Put options, and using those proceeds to buy 100 European Call options, both with the same strike price K=100. The expiry of the options is T-1 (in the scale of years). Volatility of MicroAppleBook you estimate to be o = 0.1 The risk free rate r is 2% per annum. Assume that the world actually behaves like the Black-Scholes model. 1. (10 points) How much does it cost you to enter this trade, that is, the net sum of your gain from selling the puts and buying the calls? 2. (5 points) What does the payoff of your trade look like? (hint: drawing a graph could be helpful)