Question
Questions 1 and 2 are based on the following information You want to construct a Bear spread using one call option with strike price of
Questions 1 and 2 are based on the following information You want to construct a Bear spread using one call option with strike price of $60 and one call option with strike price of $80. The costs of these options are $33 and $16 respectively. Question 1: How much you will need to spend today to construct this Bear spread. Please, be specific about the sign (positive or negative) Question 2: What will be your cash flow at time of maturity (ignoring the price you had to pay today) if the stock price will be $68. Please, be specific about the sign of this cash flow (positive means your receive money)
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