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Six month call options with strike price of 45 and 50 cost


Six month call options with strike price of $45 and $50 cost $7 and $4, respectively.

1. What is the maximum gain when a bull spread is created from the calls?

2. What is maximum loss when a bull spread is created from the calls?

3. What is the maximum gain when a bear spread is created from the calls?

4. What is the maximum loss when a bear spread is created from the calls?

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Financial Management: Six month call options with strike price of 45 and 50 cost
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