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A stock has three put options that happen to have the same expiration date, but the strike prices are $75, $80, and $85. The market prices are $4.5, $6.5, and $9.50, respectively. Explain how

A stock has three put options that happen to have the same expiration date, but the strike prices are $75, $80, and $85. The market prices are $4.5, $6.5, and $9.50, respectively. Explain how a butterfly spread can be created. Construct a table showing the profit from the strategy. For what range of stock prices would the butterfly spread lead to a loss?

Jun 26 2021 View more View Less

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