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3 . Assume that there are 3 call options on ABC Bank shares with exercise prices of Rs . 1 2 0 0 , Rs
Assume that there are call options on ABC Bank shares with exercise prices of Rs Rs and Rs with the same expiry date. Spot price of the shares is Rs Assume that the call prices are Rs Rs and Rs for the respective strike prices. Construct a bullish call spread using these call options. Show the payoff profile for this strategy assuming that on expiry day, the share price falls within the range of to at intervals of Rs ie Also show the payoff diagram.
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