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Answer questions 1012 using the following: Six-month call options with strike prices of K1=$35 and K2=$40 cost c1=$2 and c2=$1, respectively. You create a bull

image text in transcribed Answer questions 1012 using the following: Six-month call options with strike prices of K1=$35 and K2=$40 cost c1=$2 and c2=$1, respectively. You create a bull spread (long call with K1 and short call with K2 ). 10) It follows that your possible maximum payoff will be a) unlimited b) zero c) 5 d) 10 11) Your possible maximum loss is a) $1 b) $2 c) $3 d) unlimited 12) Your break-even occurs when a) ST=36b)ST=38 c) ST=40 d) ST=45

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