Series 7 - General Securities Representative Exam

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If a trader buys an ABC June 50 Call for 3.50 and simultaneously writes a June 60 Call for 1.00, what is the trader's maximum gain?

$550
A
$450
B
$750
C
$1,250
D

Explanations

$750. the trader bought the June 60/70 call debit spread for $250.00. At expiration if the price is higher that 70, the trader makes a profit of 10.00 - 2.50 premium paid.

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