In problems 0.4 and 0.5, do not assume any random process model for the stock price (meaning you cannot use the Black-Scholes formula or any other model) We let Cs(t, K, T) denote the price at time t of a call option on stock S with strike K expiring at time T. Problem 0.4. For call options which are identical except for the differing strike price Ki Cs(t, K2, T) K2 - Ki > Cs(t, K1,T) - Cs(t, K2, T) K3 - K2 K2 - K1 Cs(t, K2,T) Cs(t, K1,T) + -Cs(t, K3, T) K3-K1 K3 K1 In problems 0.4 and 0.5, do not assume any random process model for the stock price (meaning you cannot use the Black-Scholes formula or any other model) We let Cs(t, K, T) denote the price at time t of a call option on stock S with strike K expiring at time T. Problem 0.4. For call options which are identical except for the differing strike price Ki Cs(t, K2, T) K2 - Ki > Cs(t, K1,T) - Cs(t, K2, T) K3 - K2 K2 - K1 Cs(t, K2,T) Cs(t, K1,T) + -Cs(t, K3, T) K3-K1 K3 K1