Question
An investor buys a ratio spread of 1-year European calls. He buys 1 call option with strike price 40 and sells 2 call options with
An investor buys a ratio spread of 1-year European calls. He buys 1 call option with strike price 40 and sells 2 call options with strike price 50. Option prices are
| Strike price | Call option premium |
| 40 | 10 |
| 50 | 5 |
Determine the investor's profit if the ending price of the underlying stock is (a) 45, (b) 55, (c) 65. (math Finance)
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Auditing
Authors: Timothy J. Ph.D. Robertson, Jack C.; Louwers
9th Edition
0072906952, 9780072906950
