Answer:
$300
Explanation:
Calculation to the cost of establishing a debit spread
Based on the information given in order to establish a debit spread we were told that the investor bought a 40 call at the ask price of the amount of $4.50 in which the investor also sells a 45 call at the bid price of the amount of $1.50 which means that we are going to calculate the net premium of the amount that was paid in order for us to know the cost of establishing a debit spread
Hence,
Net premium= ($4.50 - $1.50) × 100 shares
Net premium=$3×100 shares
Net premium=$300
Therefore the cost of establishing a debit spread is $300
