1.The following three call options on gold, all expiring in three months, sell for:

Exercise priceOption price

$1350$104

$1400$ 78

$1450$ 57

Consider the following position:

buy 1 call with K = 1350

sell (write) 2 calls with K = 1400

buy 1 call with K = 1450

What would be the values at expiration of such a spread for various prices of spot gold?What investment would be required to establish the spread?Given information about the Exercise prices of the $1350 and $1450 options, what could you predict about the price of the $1400 (exercise) option?