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5. A stock is trading at So = 30. If the market goes up, you want to make a small (capped) profit; if it goes
5. A stock is trading at So = 30. If the market goes up, you want to make a small (capped) profit; if it goes down, you accept to make a small (capped) loss. How could you create such a "spread" strategy by trading using the following options? Strike Expiration Month Call Price Put Price 25 May 7.75 1.50 30 May 5.50 4.00 35 May 4.00 7.25 A. long the May 25 call and short the May 35 call B. long the May 35 put and short the May 25 put C. long the May 30 call and short the May 25 call D. long the May 35 put and short the May 30 call
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