Consider two call options both written on the same stock and with the same expiration date in 6 months. The strike price of call option 1 is $40 and the strike price of call option 2 is $60. Call option 1 costs $10 and call option 2 costs $3. Answer the following two questions:

(2 MARKS) What positions investor should take to create a long spread?

a.

Write call option 1 and buy call option 2

b.

Buy call option 2 and buy call option 1

c.

Write call option 2 and write call option 1

d.

Write call option 2 and buy call option 1

e.

Buy the underlying stock, write call option 2 and buy call option 1