Q o Suppose that there are three options which differ only in their strike prices such that: K1 2C2(S.T,K2) b) Assume an investor writes one call (C1) and one call (C3) and buys two call options (C2). i. ii. Draw a diagram of the profit profile for this strategy. Using the proof in part a), show that it will always yield a net inflow at the time the position is taken. If this strategy yielded a net outflow when the position was taken, what could an investor do? When might an investor use the strategy described in parti)? i Tv Q o Suppose that there are three options which differ only in their strike prices such that: K1 2C2(S.T,K2) b) Assume an investor writes one call (C1) and one call (C3) and buys two call options (C2). i. ii. Draw a diagram of the profit profile for this strategy. Using the proof in part a), show that it will always yield a net inflow at the time the position is taken. If this strategy yielded a net outflow when the position was taken, what could an investor do? When might an investor use the strategy described in parti)? i Tv