AAFM Exam CWM_LEVEL_2 Topic 5 Question 76 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 76
Topic #: 5

Section C (4 Mark)

Mr. Dinesh constructs a BULL Call Spread Strategy with one Nifty Call Option having a Strike price of Rs. 4100 available at a premium of Rs. 170.45 and another Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.

The Net Payoff of BULL Call Spread Strategy

* If Nifty closes at 4300

* If Nifty closes at 3700

A72.05 and -125.05

B64.95 and -135.05

C-115.05 and 84.95

D-65.05 and 0

Show Suggested Answer

Suggested Answer: A

by Rolande at Apr 30, 2024, 11:21 AM

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Benton

2 days ago

Hmm, this is a tricky one. I better brush up on my options trading strategies before tackling this question.

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Dewitt

9 days ago

I'm not sure, but I think the answer might be B) 64.95 and -135.05. Can someone explain the rationale behind the calculation?

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Dino

19 days ago

I agree with Maryanne, because the net payoff for the BULL Call Spread Strategy is calculated by subtracting the total premium paid from the difference between the two strike prices.

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Maryanne

20 days ago

I think the answer is A) 72.05 and -125.05

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