Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7, respectively. How can the options be used to create (a) a bull spread (buy and sell a put) and (b) a bear spread (sell and buy a put)

To create a bull spread buy the $30 put and sell the $35 put

To create a bear spread you can sell the $30 put and buy the $35 put

Explanation:

a. A bull spread is a strategy that is used by traders in options trading to gain from small rise in prices. It involves buying at a lower strike price and selling at a higher strike price.

The outcome is:

Stock price >= $35 will give a payoff of 0 and a profit of 3

$30≤ Stock price <$35 will give payoff of (stock price - $35) and a profit of (stock price - 32)

Stock price <$30 with payoff of -5 and a profit of -2

b. A bear spread is when a trader buys a contract at a higher strike price and sells at a lower strike price. This is used to maximise profit as price of the stock declines.

The outcome is:

Stock price >= $35 will give a payoff of 0 and a profit of -3

$30≤ Stock price <$35 will give payoff of ($35 -stock price) and a profit of ($32 - stock price)

Stock price <$30 with payoff of 5 and a profit of 2

the thesis statement : d

1. read the following excerpt from franklin d. roosevelt's "fireside chat 19":

on the other side of the picture, we must learn also to know that guerilla warfare against the germans in, let us say serbia or norway, us; that a successful russian offensive against the germans us; and that british successes on land or sea in any part of the world strengthen our hands.

remember always that germany and italy, regardless of any formal declaration of war, consider themselves at war with the united states at this moment just as much as they consider themselves at war with britain or russia. and germany puts all the other republics of the americas into the same category of enemies. the people of our sister republics of this hemisphere can be honored by that fact.  

the true goal we seek is far above and beyond the ugly field of battle. when we resort to force, as now we must, we are determined that this force shall be directed toward ultimate good as well as against immediate evil. we americans are not destroyers — we are builders.

analyze the effectiveness of this excerpt. how does it function within the speech as a whole? how does the structure of the excerpt to convey the speech's purpose and key points? support your argument with evidence from the speech. (10 points)