You buy a call option on Merritt Corp.with an exercise price of $50 and an expiration date in July and write a call option on Merritt Corp.with an exercise price of $55 with an expiration date in July.This is called a ________.
A) time spread
B) long straddle
C) short straddle
D) money spread

Question

Quizplus · Accepted Answer

This is called a money spread, specifically a bull call spread, where you buy a call option at a lower strike price and sell a call option at a higher strike price with the same expiration date.

You Buy a Call Option on Merritt Corp