Question: Question 1 (2 Points) Suppose that call options on a stock with strike prices of $35 and $40 cost $3.40 and $1.40, respectively and expiration

Question 1 (2 Points) Suppose that call options on a stock

Question 1 (2 Points) Suppose that call options on a stock with strike prices of $35 and $40 cost $3.40 and $1.40, respectively and expiration is in 4 months. How can the options be used to create a) a bull spread and b) a bear spread? Construct a table that shows the profit and payoff for both spreads. Draw the bull and bread spread profit diagram. (Ignore time value of money)

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