A trader creates a bear spread by selling a 9-month European Put option with a (X = $35) exercise price for $3.50,

and buying a 9-month put option with a (X = $45) exercise price for $8.00

What is the initial payoff (at t₀ )?

Group of answer choices

- $4.50

+ $4.50

- $11.50

+ $11.50

Continuing from above Bear spread question:

What is the Profit if Stock price (S = 28) when the options expires?

Group of answer choices

- $4.50

- $2.50

+ 1.50

+ 5.50