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AAFM Exam CWM_LEVEL_2 Topic 5 Question 76 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 76
Topic #: 5
[All CWM_LEVEL_2 Questions]

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

Show Suggested Answer Hide Answer
Suggested Answer: A

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

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Giuseppe
1 months ago
Wait, did Mr. Dinesh construct this strategy or is he just a spectator? I hope he's not the one who's going to get bull-ied by the market.
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Mollie
2 days ago
Let's see how the strategy plays out based on the closing price of Nifty.
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Angelica
10 days ago
He must have analyzed the market before making that decision.
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Carol
27 days ago
He constructed the BULL Call Spread Strategy with Nifty Call Options.
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Floyd
2 months ago
Aha, I think I've got it! Time to put on my options trading hat and solve this puzzle.
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Phuong
4 days ago
Actually, the correct answer is C) -115.05 and 84.95
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Lisbeth
8 days ago
No, I believe it's B) 64.95 and -135.05
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Desmond
29 days ago
I think the answer is A) 72.05 and -125.05
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Minna
2 months ago
Okay, let's see... 4100 Call at 170.45, 4400 Call at 35.40, and Nifty closing at different levels. *scratches head* This is where my calculator comes in handy.
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Mona
14 days ago
C) -115.05 and 84.95
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Wilson
15 days ago
B) 64.95 and -135.05
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Cristy
17 days ago
A) 72.05 and -125.05
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Tom
2 months ago
A BULL Call Spread, huh? Sounds like a bull is trying to spread its wings and fly, but the options prices might clip its wings.
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Narcisa
2 months ago
User 1
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Margery
2 months ago
User 2
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Blondell
2 months ago
User 1
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Benton
2 months ago
Hmm, this is a tricky one. I better brush up on my options trading strategies before tackling this question.
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Laurel
1 months ago
No, I believe it's B
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Kimi
2 months ago
B) 64.95 and -135.05
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Chantell
2 months ago
I think the answer is A
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Kirk
2 months ago
A) 72.05 and -125.05
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Dewitt
3 months 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
3 months 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
3 months ago
I think the answer is A) 72.05 and -125.05
upvoted 0 times
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