Question: You create a bull spread using calls by buying a call and simultaneously selling a call on the same stock with the same expiration at

You create a bull spread using calls by buying a call and simultaneously selling a call on the same stock with the same expiration at a higher strike price. A call option with a strike price of $20 sells for $4.55 and a call with a strike price of $25 sells for $0.96. Draw a graph showing the payoff and profit for a bull spread using these options.

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Total cost 096 455 359 Stock price Long call payoff Short call payoff Total payoff ... View full answer

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