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181
Which of the following creates a bull spread?
A.Buy a low strike price call and sell a high strike price call
B.Buy a high strike price call and sell a low strike price call
C.Buy a low strike price call and sell a high strike price put
D.Buy a low strike price put and sell a high strike price call
A.Buy a low strike price call and sell a high strike price call
B.Buy a high strike price call and sell a low strike price call
C.Buy a low strike price call and sell a high strike price put
D.Buy a low strike price put and sell a high strike price call
Answer: A
A bull spread is created by buying a low strike call and selling a high strike call. Alternatively, it can be created by buying a low strike put and selling a high strike put.
A bull spread is created by buying a low strike call and selling a high strike call. Alternatively, it can be created by buying a low strike put and selling a high strike put.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015