Question: Consider a Bear Put Spread under which you short for $1 (P1) a European put with a strike price of $40 (K1) and long for

Consider a Bear Put Spread under which you short for $1

  1. Consider a Bear Put Spread under which you short for $1 (P1) a European put with a strike price of $40 (K1) and long for $3 (P2) a European put with a strike price of $45 (K2). Fill in the blanks with $ amount per share (not in terms of notations) in the following payoff table.

Stock Price Range

Cost of Spread Strategy

Payoff from exercising K1 put you short

Payoff from exercising K2 put you long

Net profit

ST = $35

ST = $42

ST = $48

Bull Call Spread Bear Put Spread

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