The Three-Month 90-Strike Call Is Priced at $5 and the Three-Month

question 18

Multiple Choice

The three-month 90-strike call is priced at $5 and the three-month 100-strike call is priced at $3. What is the maximum possible net payoff on a bullish vertical spread using these options?

• A) $5
• B) $7
• C) $8
• D) $10

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Definitions:

Trained Introspection

A method used in early psychology involving trained observers reporting their thoughts and mental processes in response to stimuli.

Subjective

Based on or influenced by personal feelings, tastes, or opinions, rather than external facts or evidence.

Psychological Research

The scientific study of the mind and behavior through experiments, observation, and analysis to understand psychological phenomena.

Structuralism

An approach in psychology that analyzes the basic elements of thoughts and sensations to understand the structure of the mind.