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All main topics / Finance & Investment / Derivatives / Derivatives
184
4. Which of the following creates a bear spread?
A.Buy a low strike price put and sell a high strike price put
B.Buy a high strike price put and sell a low strike price put
C.Buy a high strike price call and sell a low strike price put
D.Buy a high strike price put and sell a low strike price call
Answer: B

A bear spread is created by buying a high strike call and selling a low strike call. Alternatively, it can be created by buying a high strike put and selling a low strike put.
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015

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