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Exercise 5 Consider the box spread strategy: It is a combination of a bull call spread and a bear put spread. Bull call spread: Buy
Exercise 5 Consider the box spread strategy: It is a combination of a bull call spread and a bear put spread. Bull call spread: Buy one call with exercise E1 S50 and sell one call with exercise E2 $60. Bear put spread: Buy one put with exercise E2 - $60 and sell one put with exercise E1 -S50 a. Complete the table that shows the payoffs for all the positions above. b. Construct the diagram that shows the payoff for the bull call spread, for the bear put spread, and the total spread)
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