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(12 points) Suppose you use a call spread strategy on 12/10/2020, by buying a Facebook call option with the strike price of $285 at $10,
- (12 points) Suppose you use a call spread strategy on 12/10/2020, by buying a Facebook call option with the strike price of $285 at $10, and selling a Facebook call option with the strike price of $295 at $5. Both call options mature on 12/31/2020.
- (4 points) If Facebook share is traded at $280 on 12/31/2020, what is your payoff for each of these two options? What is your total payoff? What is your profit/loss?
- (4 points) If Facebook share is traded at $290 on 12/31/2020, what is your payoff for each of these two options? What is your total payoff? What is your profit/loss?
- (4 points) If Facebook share is traded at $300 on 12/31/2020, what is your payoff for each of these two options? What is your total payoff? What is your profit/loss?
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