Q1: (Covered Call and Protective Put) An investor buys 1 share of stock XYZ at $80 butnow has a short term bearish view on the stock. The investor sees that the followingoptions are traded with high liquidity and considers some option strategies. (In youranswers, assume that options are traded at the mid-point of bid and ask prices and thetransaction costs are zero.)

a. Explain how the investor can use the above option(s) to construct a covered call strategy. b. If the stock price stays at $80 on the option maturity date, what would happen? In this case, what is the total portfolio value (or payoff) of the investor? What is the total profit/loss of the covered call strategy? c. If the stock price goes up to $85 on the option maturity date, what would happen? In this case, what is the total portfolio value (or payoff) of the investor? What is the total profit/loss of the covered call strategy?