Stock Exchange Y is now facing a shutdown due to excessive trades by participants in the initial trading of stock A. You would like to buy stock A and so decided to construct a synthetic long share position on stock A by buying call and writing put options on stock A. Call options with an exercise price of $27.00 have a premium of 25 cents while put options with exercise prices of $27.00 and $28.00 are priced at 60 cents and 70 cents respectively. All options expire in 3 months Required: i) Calculate the profit or loss for the expiry prices of $25 and $28 by summing the positions of the two options. (8 marks) ii) Also show that the same profit or loss figures are achievable from the long position of the shares, if the exchange had not shutdown. (8 marks) For all parts, ignore the time difference between the purchase of the option and its expiry. Stock Exchange Y is now facing a shutdown due to excessive trades by participants in the initial trading of stock A. You would like to buy stock A and so decided to construct a synthetic long share position on stock A by buying call and writing put options on stock A. Call options with an exercise price of $27.00 have a premium of 25 cents while put options with exercise prices of $27.00 and $28.00 are priced at 60 cents and 70 cents respectively. All options expire in 3 months Required: i) Calculate the profit or loss for the expiry prices of $25 and $28 by summing the positions of the two options. (8 marks) ii) Also show that the same profit or loss figures are achievable from the long position of the shares, if the exchange had not shutdown. (8 marks) For all parts, ignore the time difference between the purchase of the option and its expiry