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19. ABC stock is trading at $40. An investor buys a 3-month call option with a strike price of $42 and sells a 3- month
19. ABC stock is trading at $40. An investor buys a 3-month call option with a strike price of $42 and sells a 3- month call option with a strike price of $45. This strategy is called a Bull Call Spread. Create a table that shows what the various payoffs will be at prices of $36, $40, $44, $48 and $52. What does the investor believe is going to happen to the price of ABC's stock? Why did they sell the higher priced call? (4 marks)
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