Question: 3. What is the difference between naked and covered call writing? (10 points) Calculation questions (30 points) 1. Construct the payoff diagram for the purchase

3. What is the difference between naked and covered call writing? (10 points) Calculation questions (30 points) 1. Construct the payoff diagram for the purchase of an 85-strike S&R call and sale of a 100-strike S&R call. (10 points) 2. Construct the payoff diagram for the purchase of an 85-strike S&R put and sale of a 100-strike S&R put. (10 points) 3. What is the difference in the payoff diagrams for the call and put spreads? Why is there a difference? (10 points)

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