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. In this homework you are given that: The continuously compounded risk-free interest rate is 8%. The following table shows call and put option premiums

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. In this homework you are given that: The continuously compounded risk-free interest rate is 8%. The following table shows call and put option premiums for six-month European options of various strike prices: . Strike Price $40 $45 $55 Call premium Put premium $3 $2 $2 $4 $6 $1 for each strategy (1 to 6) you are required to: Write profit function. Draw profit diagram. Find the maximum and minimum profit at the expiration. 1. Call bull spread with strikes of $40 and $45. 2. Put bear spread with strikes of $45 and $55. 3. Short put butterfly spread with strikes of $40, $45 and $55. 4. Zero-cost collar. 5. Short straddle with strike of $45. 6. Short strangle with strikes $40 and $55

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