Your superior at the Money Management Company you work for has just analyzed your portfolio. He instructs you to reduce cash holdings and to reduce the overall portfolio beta. In order to perform both, you just long a huge position in Public Banks equity. Given the equitys stable nature, it has a very low beta. Now you are worried that this new investment could reduce the overall portfolio returns. You want to have the defensive stock in your portfolio but need to have higher returns than a passive buy and hold strategy. Assuming options on Public Banks stock is available, outline an appropriate strategy. (Graph the strategy, show the overall payoff, use assumed stock, and exercise prices). (10 marks)