Question: PROBLEM 5. [5 points] The given graph is the payoff function of a portfolio consisting of European options Which trading strategy among the following four

 PROBLEM 5. [5 points] The given graph is the payoff function

PROBLEM 5. [5 points] The given graph is the payoff function of a portfolio consisting of European options Which trading strategy among the following four has the same payoff (1) Buying a put option with with strike price E, expiration date T, and selling (2) Buying a call option with with strike price E, expiration date T; and buying (3) Buying a call option with with strike price E1, expiration date T and selling (4) Buying a call option with with strike price E2, expiration date T and buying Compute the four payoff functions and their graphs. function? a put option with strike price Ea expiration date T, E2 E a call option with strike price Ea expiration date T, E, > Ei. a put option with strike price El expiration date T, Ea > El

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