Q1) Provide the payoff function (on the table) for each range strike prices in which the stock price could land at expiration. There are three ranges in which the stock price could at land at expiration, which is given.

Buying a put option with strike price $150.

Selling a put option with strike price $130.

EXAMPLE of a payoff table:

Buy a call option with strike price $50

Buy a put option with strike price $30

ST	Payoff = max {ST 50, 0} + max {30 ST, 0} Payoff = max {Stock price of expire 50, 0} + max {30 Stock price at expire, 0}
ST	0 + (30 - ST) = 30 - ST
30 T	0 + 0 = 0
ST > 50	(ST 50) + 0 = ST - 50

Q2) Graph the payoff of the option strategy on the x-axis and payoff on the y-axis.

Q3) What is the net cost of the "Bear Put" strategy, and what is the highest profit you can make from the strategy?

Si Payoff Function S, 150 Si Payoff Function S, 150