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Identify and briefly explain option strategy

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Reference no: EM132558532

An investor purchases a call for CL0 = $4.10 with a strike price of XL = $49 and sells a call for CH0 = $0.90 with a strike price of XH = $55.

1) Identify and briefly explain option strategy.

1. Demonstrate the expression for the profit and compute the maximum profit and loss and the breakeven price.

2. Compute profits when the stock price is $0, $32, $44, $47, $54, $59 and $70.

Reference no: EM132558532

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