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DO NOT COPY AND PASTE ANY ANSWER FROM OTHER CHEGG POSTS Please show all work...

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Finance

DO NOT COPY AND PASTE ANY ANSWER FROM OTHER CHEGG POSTS

Please show all work so I can learn. Thanks!

______________________________________________________________

You are feeling bullish on XYZ stock and purchase a nine-month call spread on the stock. The current price of one share of XYZ stock is 58.50. The lower strike price is 60 and the higher strike price is 65. The premium for the call option with a 60-strike price is 4.35. The premium for the call option with a 65-strike price is 1.60. The continuously compounded risk-free interest rate is 6%.

Calculate the break-even stock prices.

_________________________________

I) 62.88

II) 63.88

III) 64.88

IV) 65.88

V) 66.88

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