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.

What is the maximum profit on the spread?

a$.$ $$802$

b$.$ $$198$

c$.$ none of the above

d$.$ $$500$

e$.$ $$302$

QUESTION $4$

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 usedThe 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.

$$

$$

Calls

Puts

Strike

March

June

March

June

$45$

$6\mathrm{.}84$

$8\mathrm{.}41$

$1\mathrm{.}18$

$2\mathrm{.}09$

$50$

$3\mathrm{.}82$

$5\mathrm{.}58$

$3\mathrm{.}08$

$4\mathrm{.}13$

$55$

$1\mathrm{.}89$

$3\mathrm{.}54$

$6\mathrm{.}08$

$6\mathrm{.}93$

$$

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.

How much will the spread cost?

a$.$

$$283$

b$.$

$$302$

c$.$

$$986$

d$.$

$$193$

e$.$

none of the above