SIE practice questionmediumSpreads
A bear call spread is created by:
- ABuying a call at a lower strike and selling at a higher strike
- BSelling a call at a lower strike and buying at a higher strike✓ Correct answer
- CSelling a put at a higher strike and buying at a lower strike
- DSelling a put at a lower strike and buying at a higher strike
Explanation
Why B — Selling a call at a lower strike and buying at a higher strike
A bear call spread sells the lower strike call, buys the higher. Reverse order creates a bull call spread or applies to puts.
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