Compute profit diagrams for the following ratio spreads a

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Compute profit diagrams for the following ratio spreads:

a) buy 950-strike call, sell two 1050-strike calls

b) buy two 950-strike call, sell three 1050-strike calls

c) consider buying n 950-striek calls and selling m 1050-strike calls so that the premium of the position is zero. Considering your analysis in (a) and (b), what can you say about n/m? what exact ratio gives you a zero premium?

Reference no: EM13602912

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