Question: Problem 5 (10 points) Consider the following portfolio. You write a call option with exercise price at $105 and buy a call option on the

 Problem 5 (10 points) Consider the following portfolio. You write a

Problem 5 (10 points) Consider the following portfolio. You write a call option with exercise price at $105 and buy a call option on the same stock with the same expiration date, but the exercise price is at $115. (a) Construct a payoff table for writing a call option with exercise price at $105. (b) Construct a payoff table for this portfolio. (C) Which option must cost more? In other words, which call option costs more call pre- mium? Explain it. Based on the payoff table and your conclusion of above question, plot the payoff and profit of the portfolio at the expiration of the options on the same graph. Mark key points on x- and y-axis

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