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1. An investeor buys a ratio spread of 1-year European calls. He buys 1 call option with strike price 40 and sell 2 call

1. An investeor buys a ratio spread of 1-year European calls. He buys 1 call option with strike price 40 and sell 2 call options with strike price 50. Option prices are (a) 39 (b) 45, 55, 65. (Strike price, Call option premium) = (40, 10), (50,5) Draw its profit plot. Formulas and explains regarding your plot are required. Determine the investor's profit if the end price of the underlying stock is

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