4. Six-month call options with exercise (or strike) price of $35 and $40 costs $6 and $4, respectively. Both call options have the same underlying stock and the same expiration date. Assume that options are exercised if they are in-the-money. Ignore the time value of money.

   1. a) Find the maximum gain and maximum loss when a bull spread is created from the calls. A bull spread using call options can be created by buying a call option on a stock with a low exercise price and selling a call option on the same stock with a higher exercise price. Both options have the same expiration date.

   2. b) Findthemaximumgainandmaximumlosswhenabearspreadiscreatedfromthecalls. A bear spread using call options can be created by buying a call option with a high exercise price and selling a call option on the same stock with a lower exercise price. Both options have the same expiration date.