maximum loss = net premium paid maximum gain = difference between the two strikes minus the net premium breaks even = at long call strike plus the net premium long call vertical spread cost= long option premium- short call option breakeven=(long option premium- short call premium)+ long call strike
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A survey of 200 middle managers showed a distribution of the number of hours of exercise they participated in per week with a mean of hours and a standard deviation of hours.
a) According to the Normal model, what percent of managers will exercise fewer than one standard deviation below the mean number of hours?
b) For these data, what does that mean? Justify.
c) Describe the problem in using the Normal model for these data.
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