DO NOT COPY AND PASTE ANY ANSWER FROM OTHER CHEGG POSTS

Please show work so I can learn.

__________________________

John Henry constructs a portfolio of options on shares of JHJ stock. The portfolio consists of:

+ One bull call spread (long call with a strike price of 50 and a short call with a strike price of 55)

+ One bear put spread (long put with a strike of 55 and a short put with a strike price of 50)

All options expire in 2 month. The stock does not pay dividends

The current price of one share of JHJ stock is 48.00. The continuously compounded risk-free interest rate is 3%

Determine the cost of John's portfolio.

__________________________

I) 4.98

II) 5.33

III) 6.73

IV) 8.48

V) Insufficient information to determine cost