You wish to enter a Bear Position Using Call Options. This will require two individual option positions. Describe these two positions in terms of whether options are purchased or sold and the number of contracts purchased or sold for each position. If one option is sold and another is purchased indicate which option (purchased or sold) has a higher strike price. In terms of strike prices (K1 and K2 where K1 < K2), option prices (OP1 and OP2 where OP1 corresponds to the option with strike price of K1 and OP2 corresponds to the option with strike price of K2), and underlying asset price (S),

1) What is the maximum gain that can be earned from entering this position?

2) Over what range of underlying asset prices does this maximum gain occur in terms of K1 and/or K2?

3) What is the maximum loss that can be experienced from entering this position?

4) Over what range of underlying asset prices does this maximum loss occur in terms of K1 and/or K2?