A trader creates a reverse strangle strategy by writing a call option with a strike price of $85 and a put option with a strike price of $75. If the call is trading at $5 and the put is trading at $4:

a) What is the maximum loss of this strategy? The maximum gain?

The maximum loss is $ _____

The maximum gain is $ _____

b) For what two values of the terminal spot price does the trader break even with a profit of 0?

The break-even spot prices are $ _____ and $ _____

c) At the expiration date when the trader closes all positions, the stock sells for $72. What is their net profit (indicate a gain or a loss)?

Profit is: $ _____

Enter "positive" or "negative": ____