Answers
Correct answer: a. -$3, $0, $2
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
F D Cost $5.00 $2.00 Strike Price $100.00 $105.00 Long IBM May 100 Short IBM May 105 Profit Stock Price on expiration $100.00 $103.00 $105.00 -$3 $0 $2
А В Strike Price Cost Long IBM May 100 Short IBM May 105 100 105 5 Stock Price on expiration 100 103 Profit =MAX(B6-$C$2,0)-MAX(B6-$C$3,0)+$D$3-$D$2 =MAX(B7-$C$2,0)-MAX(B7-$C$3,0)+$D$3-$D$2 =MAX(B8-$C$2,0)-MAX(B8-$C$3,0)+$D$3-$D$2 105
.
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