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7.Which of the following is correct?
A.A calendar spread can be created by buying a call and selling a put when the strike prices are the same and the times to maturity are different
B.A calendar spread can be created by buying a put and selling a call when the strike prices are the same and the times to maturity are different
C.A calendar spread can be created by buying a call and selling a call when the strike prices are different and the times to maturity are different
D.A calendar spread can be created by buying a call and selling a call when the strike prices are the same and the times to maturity are different
A.A calendar spread can be created by buying a call and selling a put when the strike prices are the same and the times to maturity are different
B.A calendar spread can be created by buying a put and selling a call when the strike prices are the same and the times to maturity are different
C.A calendar spread can be created by buying a call and selling a call when the strike prices are different and the times to maturity are different
D.A calendar spread can be created by buying a call and selling a call when the strike prices are the same and the times to maturity are different
Answer: D
A calendar spread is created by buying an option with one maturity and selling an option with another maturity when the strike prices are the same and the option types (calls or puts) are the same.
A calendar spread is created by buying an option with one maturity and selling an option with another maturity when the strike prices are the same and the option types (calls or puts) are the same.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015