1. [25 points] The following table provided CALL and PUT options for Apple Inc. (AAPL) stock, which ended trading at US$1203 (-$0.93; -0.76%) on March 12, 2021 (at 4:00PM EST; at close). According to the listing, the options are going to expire on April 16, 2021 (i.e., it expires in 35 days). One option contract is equivalent to 100 shares.

CALL
	Option Price
Strike	Last Price	Bid	Ask	Change	% Change	Volume	Open Interest	Implied Volatility
85	35.25	36.2	36.35	-1.85	-4.99%	1	939	62.70%
90	31.25	31.25	31.4	-1.03	-3.19%	10	1,944	55.76%
95	26.15	26.35	26.55	0.25	0.97%	1	601	50.73%
100	21.4	21.55	21.7	-1.1	-4.89%	79	4,566	46.95%
120	5.59	5.55	5.7	-0.61	-9.84%	14,763	79,844	35.24%
125	3.35	3.35	3.4	-0.44	-11.61%	6,240	72,491	34.35%
150	0.28	0.28	0.29	-0.03	-9.68%	1,274	48,878	40.82%
PUT
Strike	Last Price	Bid	Ask	Change	% Change	Volume	Open Interest	Implied Volatility
85	0.18	0.16	0.18	0	-	32	2,732	58.98%
90	0.24	0.23	0.25	-0.02	-7.69%	16	5,063	53.71%
95	0.37	0.31	0.36	0	-	93	6,651	49.12%
100	0.52	0.52	0.54	-0.01	-1.89%	423	13,718	44.48%
110	1.5	1.47	1.5	0.11	7.91%	1,753	19,349	37.60%
120	4.55	4.5	4.55	0.4	9.64%	17,619	89,396	34.42%
125	7.28	7.2	7.3	0.53	7.85%	580	56,787	33.86%
130	10.95	10.7	10.85	0.78	7.67%	719	31,335	33.90%
140	19.97	19.45	19.6	1.45	7.83%	5,095	90,098	36.23%
150	29.25	29.1	29.25	1.09	3.87%	364	4,639	40.58%

Source: AAPL 121.03 -0.93 -0.76% : Apple Inc. - Yahoo Finance; NasdaqGS Real Time Pric

1. Suppose you purchase Apple Inc.s stock for $120 and a PUT option for $4.55 per share with a strike price of $120 per share. At the same time, you sell a call for $5.59 with a strike price of $120. (Answer the following questions per share).
   1. What is the maximum profit or loss for this strategy?
   2. Draw the profit and loss diagram for this strategy as a function of the stock price at expiration.
   3. Draw the payoff diagram for this strategy as a function of the stock price at expiration.
   4. What is the profit (loss) per contract of this strategy if the share price goes down to $100?