The following prices are available for call and put options on a stock priced at $$50.$ The risk$-$free rate is $6$ percent and the volatility is

$0\mathrm{.}35.$ The March options have $90$ days remaining and the June options have $180$ days remaining. The Black$-$Scholes model was used

to obtain the prices.

Assume that each transaction consists of one contract $($for $100$ shares$)$ unless otherwise indicated.

Consider a bull money spread using the March $45/50$ calls.Consider a bull money spread using the March $45/50$ calls.

$1.$ How much will the spread cost?

a$.$ $$283$

b$.$ $$302$

c$.$ $$986$

d$.$ $$193$

e$.$ none of the above

$2.$What is the maximum profit on the spread?

a$.$ $$802$

b$.$ $$198$

c$.$ none of the above

d$.$ $$500$

e$.$ $$302$

$3.$What is the maximum loss on the spread?

a$.$ $$802$

b$.$ $$198$

c$.$ none of the above

d$.$ $$698$

e$.$ $$500$

$4.$What is the profit if the stock price at expiration is $$47?$

a$.$ $$302$

b$.$ none of the above

c$.$ $$102$

d$.$ $$500$

e$.$ $$398$

$5.$ Assume that each transaction consists of one contract $($for $100$ shares$)$ unless otherwise indicated.

$$Suppose an investor expects the stock price to remain at about $$50$ and decides to execute a butterfly spread using the June calls.

What will be the cost of the butterfly spread?

a$.$ none of the above

b$.$ $$1,045$

c$.$ $$637$

d$.$ $$1,195$

e$.$ $$79$

$6.$Suppose an investor expects the stock price to remain at about $$50$ and decides to execute a butterfly spread using the June calls.

What will be the profit if the stock price at expiration is $$52\mathrm{.}50?$

a$.$ $$1\mathrm{.}037$

b$.$ none of the above

c$.$ $$421$

d$.$ $$1,421$

e$.$ $$171$

$7.$Assume that each transaction consists of one contract $($for $100$ shares$)$ unless otherwise indicated.A long straddle constructed using the June $50$ options.What will the straddle cost?

a$.$ none of the above

b$.$ $$413$

c$.$ $$690$

d$.$ $$145$

e$.$$$971$

$8.$ Assume that each transaction consists of one contract $($for $100$ shares$)$ unless otherwise indicated.A long straddle constructed using the June $50$ options.What are the two breakeven stock prices at expiration?

a$.$ $$54\mathrm{.}13$ and $$45\mathrm{.}87$

b$.$$$55\mathrm{.}58$ and $$44\mathrm{.}42$

c$.$ $$59\mathrm{.}71$ and $$40\mathrm{.}29$

d$.$ $$55\mathrm{.}58$ and $$45\mathrm{.}87$

e$.$ none of the above

$9.$What is the profit if the stock price at expiration is at $$64\mathrm{.}75?$

a$.$ $$500$

b$.-$$$971$

c$.-$$$3,525$

d$.$ none of the above

e$.$ $$1,475$

$10.$A long box spread using the June $50$ and $55$ options.What is the cost of the box spread?

a$.$ $$484$

b$.$$$500$

c$.$ none of the above

d$.$$$2,018$

e$.$$$76$

long box spread using the June $50$ and $55$ options.

What is the profit if the stock price at expiration is $$52\mathrm{.}50?$

a$.$ $$250$

b$.$$$234$

c$.$ none of the above

d$.$ $$500$

e$.$ $$16$

A long box spread using the June $50$ and $55$ options.

What is the net present value of the box spread?

a$.$ $$5\mathrm{.}00$

b$.$$$1\mathrm{.}84$

c$.$none of the above

d$.$$$16\mathrm{.}00$

e$.$$$9\mathrm{.}84$