Implement a bull spread on a stock

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An investor wants to implement a bull spread on a stock with a current price of $29. The investor buys one call option contract on the stock with a strike price of $30 and sells a call option contract on the stock with a strike price of $32.50. The prices of the options are $2.75 and $1.50 per share, respectively. The options have the same maturity date. Provide a detailed graph illustrating the investor's position.How could the investor have implemented a bear spread with the same options? How would the announcement of a $1/share dividend affect the value of these call options? Explain.

Reference no: EM133086650

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