Answer:
Therefore, the maximum profit is $4 and the maximum loss is -$6
Explanation:
The computation is shown below:
In the case of put option
Profit or loss = Strike price of the good - purchase price of good
= $34 - $40
= -$6
In the case of call option
Profit or loss = Strike price of the good - purchase price of good
= $44 - $40
= $4
Therefore, the maximum profit is $4 and the maximum loss is -$6
