Consider the following investments An investor short sells a stock at a price S, and writes an al the money call option on the same stock with a strike price of k An investor buys one put with a strike price of K1 and one call option at a strike price of K2 with K1 K2 (a) Plot the expiration payoff diagrams in each case (b) How would these diagrams look some time before expiration

Question: Consider the following investments * An investor short sells a stock at a price S, and writes an al-the-money call option on the same stock

Consider the following investments
* An investor short sells a stock at a price S, and writes an al-the-money call option on the same stock with a of k
* An investor buys one put with a of K1 and one call option at a of K2 with K1 ≤ K2.
(a) Plot the expiration payoff diagrams in each case
(b) How would these diagrams look some time before expiration?

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