SIE practice questionhardSpreads - bull/bear, debit/credit
A bull call spread strategy is designed to:
- ALimit both risk and reward in a rising market✓ Correct answer
- BMaximize profit in any market
- CProfit most from a sharply falling market
- DHedge a stock position
Explanation
Why A — Limit both risk and reward in a rising market
Bull call spreads cap potential gains and losses in bullish markets. They do not maximize profit or hedge positions.
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