Question 2. a) Draw a payout profile for the following two call spread portfolios: (i) long one K-call and short one (K + 1)-call. (ii) long two K-calls and short two (K+.5)-calls. b) A digital call with strike price K and maturity T pays out 1 if ST > K and 0 if ST K. Write down the equivalent formula for a digital put option in terms of put prices. d) By examining the payout profile, derive a put-call parity relationship for the digital call and digital put. Question 2. a) Draw a payout profile for the following two call spread portfolios: (i) long one K-call and short one (K + 1)-call. (ii) long two K-calls and short two (K+.5)-calls. b) A digital call with strike price K and maturity T pays out 1 if ST > K and 0 if ST K. Write down the equivalent formula for a digital put option in terms of put prices. d) By examining the payout profile, derive a put-call parity relationship for the digital call and digital put