You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $67 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: Wildwood Corporation Underlying Stock price: $67.00 Call Exp. Strike Put June $62.00 $ 10.20 $3.70 June $72.00 $2.85 $9.20 Ignoring commissions, the cost to establish the bull money spread with calls would be (If the spread is a cash outflow, please use a negative sign.) 735

You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $67 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: Wildwood Corporation Underlying Stock price: $67.00 Call Exp. Strike Put June $62.00 $ 10.20 $3.70 June $72.00 $2.85 $9.20 Ignoring commissions, the cost to establish the bull money spread with calls would be (If the spread is a cash outflow, please use a negative sign.) 735

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter20: Financing With Derivatives

Section20.A: The Black-scholes Option Pricing Model

Problem 1P

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