ratio, 37. Bull Spreads and Bear Spreads Two British pound () put options are available with exercise prices of $1.60 and $1.62. The premiums associated with these options are $0.03 and $0.04 per unit, respectively. (See Appendix B in this chapter.) a. Describe how a bull spread can be constructed using these put options. What is the difference between using put options versus call options to con- struct a bull spread? b. Complete the following worksheet. ha ex nc tic th C th eq 40 10 go rec ag sora 085 VALUE OF BRITISH POUND AT OPTION EXPIRATION rat $1.55 $1.60 $1.62 $1.67 rei Put @ $1.60 Put @ $1.62 Net in mo pu - Di Rh C. At option expiration, the spot rate of the pound is $1.60. What is the bull spreader's total gain or loss? d. At option expiration, the spot rate of the pound is $1.58. What is the bear spreader's total gain or loss? 38. Profits from Using Currency Options 41 As pol