Question: A trader wants to construct a top vertical combination: she sells a call option with a strike price of $60 and a put option with

A trader wants to construct a top vertical combination: she sells a call option with a strike price of $60 and a put option with a strike price of $40. Both options have the same maturity. The call costs $5 and the put costs $7.

a) Construct a table showing the payoff from the strategy. (3 pts)

b) Construct a table showing the profit from the strategy. (3 pts)

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