QUESTION 1 a. How are these strategies constructed from options? Provide all the details (20 MARKS) (20 MARKS) Trowch drosedd/Turn over QUESTION 1 CONTINUED (20 MARKS) b. Using the options in the following table construct a long call spread (bull spread) strategy, that will pay an increasing amount after ST >10, up to a maximum of 200 when ST2 15. Provide all the details and calculate the cost of the strategy and draw the payoff diagram (ignore the premium for payoff diagram). Option type 10 strike call 15 strike call Premium 1 20.5 (40 MARKS) Trowch dresodd/Turn over