Question: Assume that , . Suppose you enter into a put ratio spread where you buy a 45-strike put and sell two 40-strike puts. If you

Assume that Assume that , . Suppose you enter into a put ratio spread , . Suppose you enter into a put ratio spread where you buy a 45-strike put and sell two 40-strike puts. If you delta-hedge this position, what investment is required? What is your overnight profit if the stock tomorrow is $39? What if the stock is $40.50?

S=40, 0 = 30 r=0.08,3 = 0

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