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4. Suppose there are three different call options available on the same underly- ing stock with the same expiration. You bought a call with an
4. Suppose there are three different call options available on the same underly- ing stock with the same expiration. You bought a call with an exercise price of $40, bought a call with an exercise price of $30, and sold two calls with an exercise price of $35. What position have you created? Graph its payoff at maturity. What is the payoff of this position at maturity if the underlying stock price is at $90? What is the lowest value this position could have at maturity, and for what range of stock prices
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