Consider a bullish spread option strategy using a call option with a $25 exercise price priced at $4 and a call option with a $40 exercise price priced at $2.50. If the price of the stock increases to $50 at expiration and each option is exercised on the expiration date, the net profit per share at expiration (ignoring transaction costs) is:

1. Draw the Payoff & Profit diagram for each state of nature

2. What is the net profits per share if the share price is $40?