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A bull spread strategy is created by buying a European call option on a stock with...

A bull spread strategy is created by buying a European call option on a stock with a certain strike price and selling a European call option on the same stock with a higher strike price. Both options have the same expiration date. Suppose that an investor buys for £3 a 3-month European call with a strike price of £29 and sells for £1 a 3-month European call with a strike price of £34.

  1. What is the total payoff of this bull spread strategy if the stock price in 3 months is £38?

  1. What is the net profit to this strategy?

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ekkarill92 answered 2 years ago
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