1. You decide to design a bear spread with two call options: buy the call struck at X₁ = 50 trading at C₁ = $12, write the call struck at X₂ = 70 trading at C₂ = $4. What will be the profit from your strategy on the expiration day if the underlying stock trades at $45?

a. -6

b. 8

c. 3

d. -2

2. You sell 10 contracts of call option on Index XYZ. EAch contract is on 100 units of the index. the option premium is currently $40, and delta is $0.7512. The underlying index trades at $4,008. Approximately how much money do you need to borrow to create a delta neutral portfolio?

a. $2.27 million

b. $3.25 million

c. $2.40 million

d. $3.01 million

PLEASE NEED HELP answer all the 2 questions. thanks