Suppose that call options on stock with strike prices

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Suppose that call options on a stock with strike prices $30 and $35 cost $7 and $2, respectively. How can the options be used to create (a) a bull spread and (b) a bear spread? Construct a table that shows the profit and payoff for both spreads. Illustrate using diagrams.

Reference no: EM13950764

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Suppose that call options on stock with strike prices : Suppose that call options on a stock with strike prices $30 and $35 cost $7 and $2, respectively. How can the options be used to create (a) a bull spread and (b) a bear spread? Construct a table that shows the profit and payoff for both spreads. Illu..

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