Chapter 15, Problem 27C

You write a call option with $X=\$50$ and buy a call with $X=\$60$ . The options are on the same stock and have the same expiration date. One of the calls sells for $\$\text{3}$ ; the other sell for $\$\text{9}$ . $\left(\text{LO 15}-\text{2}\right)$
a. Draw the payoff graph for this strategy at the option expiration date.
b. Draw the profit graph for this strategy.
c. What is the break-even point for this strategy?
d. Is the investor bullish or bearish on the stock?