QUESTION 7 Suppose we are given the following information of a stock: S = 100, r = 5%, 0 = 30%, and the dividend yield of the stock is 3%. If an investor wants to set up a credit spread using put options at strike price of $80 and $70 that matures in 0.25 years, estimate his max profit based on BSM model (again, we assume one option covers one share of stock) $0.37 $0.03 $0.34 Cannot be determined. QUESTION 8 Which of the following regarding option greeks is correct? For both call and put options, the magnitude (absolute value) of delta is the largest when the options are at the money Theta is always negative for both call option and put option. Vega is positive for call option and negative for put option Rho is negative for call option and posive for put option