3. You are given:

i) An investor short-sells a non-dividend-paying stock that has a current price of 44 per share.

ii) This investor also writes a collar on this stock consisting of a 40-strike European put option and a 50-strike European call option. Both options expire in one year.

iii)

the prices of the options on this stock are: strick price	call option	put option
40	8.42	2.47
50	3.86	7.42

Calculate the maximum profit for the overall position at expiration.

mark value = 5