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The table below gives today’s prices of one-year European call options written on a share of...

The table below gives today’s prices of one-year European call options written on a share of stock XYZ at different strike prices.

Strike price and call price respectively

X= 55, 9

Y =60, 4.5

Z= 65 , 1

In each of the following strategies provide a table showing the relationship between profit and stock price at maturity as well as the range of stock prices at maturity for which the strategy is profitable.

a) A bear spread with strike prices of $55 and $60.

b) A position where you buy one $55 call and sell 2 $60 calls.

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