esing the table of option premiums below, what is the maximum loss of the following portfolio strategy: sell 2 calls with a strike price of $40, and buy 1 put with a strike price of $70, and buy 1 call with a strike price of $50, and buy 2 calls with a strike price of $60? (All calls and put are written on the same stock with the same expiration date) Premium Strike price Option type $20 $40 Call $15 $70 Put $10 $50 Cll $5 $60 Call 4. We will derive a two-state put option value in this problem. We have the following information: So 100; X = 110; 1 +r; = 1.10. The two possibilities for Sr are 120 and 80. a. Show that the range of S is 40 while that of put option is 30 across the two states. What is the hedge ratio of the put? %3D b. Form a portfolio of three shares of stock and four puts. What is the (nonrandom) pay-off to this portfolio? What is the present value of the portfolio? c. Given that the stock currently is selling at 100, what is the value of this put option? 5. MetLife, Inc. stock is currently trading at $50 per share. The price of MetLife stock can either inerease by 20% or decrease by 20% each year. The probability of an increase is equal to the probability of a decrease (pu = Pa = 0.5). The risk-free rate of return is 10% per year. What is the current equilibrium price of a 2-year European call option on MetLife with a strike price of $50