Suppose that the price of a non-dividend-paying stock is $32, its volatility is 30%, and the risk- free rate for all maturities is 5% per annum. Consider: a. A bull spread using European call options with strike prices of $25 and $30 and a maturity (T) of six months. b. A bear spread using European put options with strike prices of $25 and $30 and a maturity (T) of six months Take a) and b) in turn. Calculate the cost of setting up the above strategies Show the possible outcomes at maturity using a table with possible outcomes: St K2 In each case also provide a diagram/figure showing the relationship between the profit from these strategies and the possible outcomes at T for the stock price. Note: Profit = Payoff to options Cost of implementing the options' positions