1i dont know how to solve 1.4

1.2. Convince yourself that max (S(T) E, 0) +max(E S(T), 0) is equiv- alent to IS(T) E and draw the payoff diagram for this bottom straddle. 1.3. Suppose that for the same asset and expiry date, you hold a European call option with exercise price E1 and another with exercise price E3, where E3 E1 and also write two calls with exercise price E2:- (E1 E3)/2. This 'is an example of a buterfly spread.1 Derive a formula for the value of this butterfly spread at expiry and draw the corresponding payoff diagram. 1.4. The holder of the bull spread with payoff diagram in Figure 1.3 would like the asset price on the expiry date to be at least as high as E2, but, if it is, the holder does not care how much it exceeds E2. Make similar statements about the holders of the bottom straddle in Exercise 1.2 and the butterfly spread in Exercise 1.3