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Part 1: Bull Spread A) Consider buying a call option with a strike of $25 and a selling call option with strike of $30. FEU
Part 1: Bull Spread A) Consider buying a call option with a strike of $25 and a selling call option with strike of $30. FEU in the table for the payoffs of the bull spread (10 points) Payoff from a bull spread created using calls Stock price Payoff from Payoff from Total range long call option short call option payoff Sy K2 Sy - K -(Sy - K) K-K 0 Plot the graph of the stock price (x-axis) vs. the total payoff (y-axis) for the bull spread. Label the axes and chart title (10 points) A) Bull Spread Payoff Long call option Short call option K1 = K2 = Stock Price (ST) Total Payoff $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 2 3 4 5 6
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