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Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity In $ Call

Followings are the strike prices and the relevant options prices for both put and call options. All options are of same maturity

In $ Call Option Put Option

30 $4 $0.5

35 $3.8 $0.8

Suppose that an investor is interested to construct a bear spread using put option information above. If the market price of underling at maturity is $40, complete the table below?

Option Position ST K f (premium, price,value) Net Pay off

Long Call $40 $(fill in) $(fill in) $(fill in)

Short Call $40 $(fill in) $(fill in) $(fill in)

Strategy cost $(fill in)

Strategy Pay off $(fill in)

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