Question: You construct a bear spread by selling a 6-month put option with a $25 strike price for $2.50 and buying a 6-month put option with
You construct a bear spread by selling a 6-month put option with a $25 strike price for $2.50 and buying a 6-month put option with a $29 strike price for $4.50. Compute the spread profit (including the cost) when the stock price in 6 months becomes (a) $23, (b) $26, and (c) $33.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
