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You are bullish on a stock and are considering entering into a bull spread option strategy. If you go long a call with a strike
You are bullish on a stock and are considering entering into a bull spread option strategy. If you go long a call with a strike price of $100 for $3.09 and go short a put with a $105 strike for $1.21. Your gross payoff from the strategy will _______ and your up front cost will ________.
a. Not be capped, increase to $3.56 | ||
b. Capped at $5, increase to $3.56 | ||
c. Not be capped, decrease to $1.88 | ||
d. Capped at $5, decrease to $1.88 |
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