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2 How many different Bear Spreads can you create with this table of options? (5 points) 3 Create a Bear Spread with call options that
2 How many different Bear Spreads can you create with this table of options? (5 points) 3 Create a Bear Spread with call options that maximizes the ratio of potential gain to loss. a. What should you buy? b. What should you sell? c. What does your strategy cost (or what cash inflow does it generate) today? d. What is the most your strategy can make (maximum profit)? e. What is the most that your strategy can lose? f. At what price(s) do you break even? (30 points for any credible bear spread call options +10 points for the best one) 2 How many different Bear Spreads can you create with this table of options? (5 points) 3 Create a Bear Spread with call options that maximizes the ratio of potential gain to loss. a. What should you buy? b. What should you sell? c. What does your strategy cost (or what cash inflow does it generate) today? d. What is the most your strategy can make (maximum profit)? e. What is the most that your strategy can lose? f. At what price(s) do you break even? (30 points for any credible bear spread call options +10 points for the best one)
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