Expiration time as a function of the price of the security

Reference no: EM131055480

Suppose that you simultaneously buy a call option with strike price 100 and write (i.e., sell) a call option with strike price 105 on the same security, with both options having the same expiration time. (a) Is your initial cost positive or negative? (b) Plot your return at expiration time as a function of the price of the security at that time.

Reference no: EM131055480

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