2. You are interested in creating the following gross payoff profile using an options portfolio:
Stock price | 60 | 70 | 80 | 90 | 100 | 110 | 120 | 130 | 140 | 150 |
Payoff | 10 | 30 | 20 | 10 | 0 | 10 | 30 | 10 | 0 | -10 |
What options, at what strikes, would you hold in your portfolio? Assume that the desired payoffs are zero for any stock price less than 50 or greater than 160.
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