What is maximum amount the trader can make on bear spread

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Reference no: EM131513793

A trader executes a “bear spread” on the Euro consisting of a long (buy) $1.10/€ March put and a short (sell) $1.03/€ March put. a. If the price of the $1.10/€ put is 0.035 $/€, while the price of the $1.03/€ put is 0.028$/€, what is the net cost of the bear spread? b. What is the maximum amount the trader can make on the bear spread in the event the euro depreciates against the dollar?

Reference no: EM131513793

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