2. Construct profit diagrams at expiration time to show what position in IBM puts, calls and/or underlying stock best expresses the investor's objectives described below. IBM currently sells for $150 so that profit diagrams between $100 and $200 in $10 increments are appropriate. Assume that at-the-money puts and calls currently cost $20 each. The call with strike $140 costs $25 and the call with strike $160 costs $17. (a) An investor wants to benefit from IBM price drops, but does not want to lose more than $20 on the investment. 1 (b) An investor wants to profit if the the upcoming IBM earnings announcement is very close to market expectationsmeaning that the price will not move by more than $10 dollars. EDIT 5/4: I should have written: an investor wants to have a positive payoff if the price of IBM stock does not move by more than $10