The profit of a company at time T = 1 is given by ST $1,780, per ounce of gold, where ST is the price of gold at time T and $1,780 is the production costs (also time-T value). Suppose company wants to hedge its exposure to gold price risk using two options at the same time: a gold put option with strike price $1,820 and a gold call option with strike price $1,840. Both options expire at T = 1. The effective annual rate is 3%, and the prices of the put and call option are $18.77 and $12.49.

1.What is the maximum hedged profit of company, per ounce of gold?

2.What is the minimum hedged profit of company, per ounce of gold?

3. What is the hedged profit of company, per ounce of gold, when at time T the gold price ST = $1,830?