3. (Speculation on volatility; the straddle strategy; the same strike price) The current stock price of Starbucks (SBUX) = $85.85. Robert buys one SBUX November 82.5 European call option contract at $5.10/share and simultaneously buys one SBUX November 82.5 European put option contract at $1.96/share.

(a) Calculate Roberts cost ($) when he buys one call and one put option contract simultaneously.

(b) Calculate Roberts payoff and net profit (loss) from his straddle strategy (buying 1 call and buying 1 put option contract with the same strike price) for each scenario at option expiration.

(c) Find two breakeven stock prices ($) at option expiration for the straddle strategy.

(d) If the stock price=$94/share at option expiration, calculate Roberts return (%) considering both the final payoff at option expiration and the total cost.

(e) For each breakeven point, calculate its stock return from the current stock price ($85.85) to the breakeven stock price.