Create a bull spread from options A and B

Reference no: EM132184149

Question - Consider the following three European call options, all with expiration at time T = 1: option A has strike $10; option B has strike $15; and option C has strike $20.

(a) Create a bull spread from options A and B, and graph its payoff as a function of S(T).

(b) Create a bear spread from options B and C, and graph its payoff as a function of S(T).

Reference no: EM132184149

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