Six-month call options with strike prices of $35 and $40 cost $6 and $4 respectively.
i) What is the maximum gain when a bull spread is created from the calls? _ _ _ _ _ _
ii) What is the maximum loss when a bull spread is created from the calls? _ _ _ _ _ _
iii) What is the maximum gain when a bear spread is created from the calls? _ _ _ _ _ _
iv) What is the maximum loss when a bear spread is created from the calls? _ _ _ _ _ _

Question

Quizplus · Accepted Answer

The Answer is i): $3
ii): $2
iii): $2
iv): $3

Six-Month Call Options with Strike Prices of $35 and $40