2 You would lke to construct a position that will have a constant "ceiling" on the total profit if stock price goes down 3 and a constant "floor" on the total loss if the price goes up. Use must use two put options to achieve this result. 4 You have access to two put options with the following characteristics: 5 Option A: strike price of $45, the price of this put option is $4 per share. 6 Option B: strike price is $40, the price of this put option is $2 per share 7 Both options have the same time to maturity and can only be excercised on expiration date. 8 9 (a) Describe you position in the two put options. (7 points) 10 11 12 13 14 15 Given your answer in part a answer parts b, c and d about the combined position. 16 (b) What is your total profit or loss per share if the stock price is $43 per share at expiration? (6 points) 17 18 19 20 21 22 23 (c.) What is your total profit or loss per share if the stock price is $5 per share at expiration? (6 points) 24 25 26 27 28 29 30 (d) What is your total profit or loss per share if the stock price is $80 per share at expiration? (6 points) 31 32