With a Bull Spread, the Spreader Believes That the Underlying

question 152

True/False

With a bull spread, the spreader believes that the underlying currency will appreciate substantially, even more so than with a strangle.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of the level of production or sales, including items like rent, salaries, and insurance.

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating how much sales contribute to fixed costs and profit.

Budgeted Sales

Projected sales figures that are estimated by a business for a future accounting period, used for planning and strategic purposes.

Operating Income

A measure of a company's profitability that excludes non-operating income and expenses, focusing on core business activities.