Consider an investment strategy in the option markets You buy an European call (c 1 ) with an exercise price K 1 and, at the same time you sell another European call (c 2 ) with exercise price K 2 , where K 2 K 1 Assume maturities of both options are the same Graph and set the payoffs for each opti...

Certainly Lets break down the investment strategy and its payoff structure 1 European Call Option c1 ...

Consider an investment strategy in the option markets. You buy an European call (c 1 ) with

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Consider an investment strategy in the option markets. You buy an European call (c₁) with an exercise price K₁and, at the same time you sell another European call (c₂) with exercise price K₂, where K₂>K₁. Assume maturities of both options are the same. Graph and set the payoffs for each option and, the final payoff of your strategy. Analyze and discuss.