SIE practice questionhardMax gain/loss calculations
The maximum gain in a debit put spread is calculated as:
- ANet premium received
- BNet premium paid
- CStrike price plus net premium
- DDifference in strike prices minus net premium paid✓ Correct answer
Explanation
Why D — Difference in strike prices minus net premium paid
Maximum gain for a debit put spread equals the difference in strikes minus net premium. Premium alone is not the gain, and net premium received applies to credit spreads.
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