Suppose price for IBM May 100 put is $3 and for IBM May 105 put is $5.

a)How to create a bear spread?

Buy 1 contract put options with K2=105 and Sell 1 contract put option with K1=100

b)Fill in the missing values for the following Table.

Stock Price Range	Payoff	Profit (the initial cost is 2)
ST100	5	+3
100T<105	105-ST	103-ST
ST105	0	-2

c)What is the maximum potential profit of your strategy?

300

d) If, at expiration, the price of a share of IBM stock is $102, what would be your profit?

+100

e) What is the maximum loss you could suffer from your strategy?

-200

f) What is the lowest stock price at which you can break even?

103

show me how to get these answers