3. (5 points) You write a call option with X-$40 and buy a call with X-$60....

    

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3. (5 points) You write a call option with X-$40 and buy a call with X-$60. The options are on the same stock and have the same maturity date. One of the calls sells for $2 and the other for $9. a) Draw the profit/loss graph for this strategy. b) What is the break-even point of this strategy? 3. (5 points) You write a call option with X-$40 and buy a call with X-$60. The options are on the same stock and have the same maturity date. One of the calls sells for $2 and the other for $9. a) Draw the profit/loss graph for this strategy. b) What is the break-even point of this strategy?

Answer rating: 100% (QA)

To create the profitloss graph for this strategy we need to consider the combined payoff of writing ... View the full answer