Problem 20:5

An investor purchases a stock for $38 and a put for $0.50 with a strike price of $35. The investor sells a call for $0.50 with a strike price of $40. What is the maximum profit and loss for this position?

What is the Max profit?

Note: It is not 2.00, -2.00, 3.00,-3.00, or 42.00. These are all incorrect answers that I have been provided. Please do not response if you believe any of these are the correct answer.