Which One of the Following Is a Bull Call Spread

question 56

Multiple Choice

Which one of the following is a bull call spread?

• A)buying a $20 call and selling a $25 call on the same stock
• B)selling a $20 call and buying a $25 call on the same stock
• C)buying a $20 call and selling a $15 call on the same stock
• D)selling a $20 call and buying a $25 put
• E)buying a $20 call and selling a $25 put

---

Definitions:

Foreign Exchange Gain

Foreign Exchange Gain arises when a currency transaction results in receiving or paying fewer units of the home currency than initially anticipated due to exchange rate movements.

Option Strike Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.

Spot Rate

The current market price used for immediate settlement of a currency, security, or commodity transaction.

Hedge Accounting

An accounting method that modifies the normal treatment of gains and losses from hedging activities so that they are recorded in the same period as the offsetting gains or losses on the hedged item.