Question: A bear spread payoff has the form g ( S T ) = max ( K 2 - S T , 0 ) - max

A bear spread payoff has the form
g(ST)=max(K2-ST,0)-max(K1-ST,0),
where 0.
(a) Sketch the payoff diagram.
(b) Use the general formula for the European option pricing function to find
the time-zero option price of a bear spread.
solve by mathematical calculation. not theory
A bear spread payoff has the form g(ST)=max(K2-ST,0)-max(K1-ST,0), where 0. (a)

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