Your task, as the recently recruited PWCs Quant Analyst, is to provide a thorough analysis of the following

The price of a non-dividend paying stock is $28, its volatility is 25%, and the risk-free rate for all maturities is 3% per annum.

Butterfly spread using puts: European put options with strike prices of $25, $30 and $35, maturing in 1 year

Given the assumption that the exercise price in a straddle is midway between the two exercise prices in a strangle, demonstrate which trading position is created by combining a long straddle with a short strangle, when both have the same time to maturity? Clearly show your working and final profit and loss diagram.