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A trader creates a bear spread by selling a six-month put option with a $25 strike price for $2.15 and buying a six-month put option
A trader creates a bear spread by selling a six-month put option with a $25 strike price for $2.15 and buying a six-month put option with a $29 strike price for $4.75.
What is the initial investment?
What is the total payoff when the stock price in six months is
(a) $23,
(b) $28, and
(c) $33.
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