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Suppose that call options on a stock with strike prices $30 and $40 cost $8 and $4, respectively. To create a bull spread by buying
Suppose that call options on a stock with strike prices $30 and $40 cost $8 and $4, respectively. To create a bull spread by buying the $30 call and selling the $40 call.
a. Construct a table that shows the profit for the spread. (You can refer the table below as a hint)
b. Plot the profit with important number and formula.
Stock Price ST | Buy $30 call | Sell $40 call | Overall Profit |
$40 < | |||
$30 to $40 | |||
< $30 |
Need both solved ASAP, please.
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