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Option Payoff Boeing Aerospace currently has a stock price of 167.50. The 1-month options listed below are trading in the market. The term structure of

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Option Payoff

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Boeing Aerospace currently has a stock price of 167.50. The 1-month options listed below are trading in the market. The term structure of interest rates is at, with the current 1year Spot Rate equal to 1.25% {APR with semiannuai compounding}. Cali Strike Put 9.45 160 178 141 165 4.36 3.38 1 TO 5.92 a] Are there any arbitrage trading opportunities? If so, identify the trading strategy and profits. 1:} You have a bearish outlook for Boeing. Using put options and the given prices, which Bear Spread has the: [1] highest maximum payoff; (in highest potential rate of return; 6} Describe the risks of each Bear Spread if the price of Boeing does not change over the next month [i.e. if ST 2 1617.5]

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