Question: 1. True or False: To create a butterfly spread, one needs to long 1 put with low K, short 1 put with middle K, and

1. True or False: To create a butterfly spread, one needs to long 1 put with low K, short 1 put with middle K, and long 1 put with high K.

2. Mary speculates that ABC stock price will decrease. Which action should she take now?

a. Buy a call and a put with the same strike price.

b. Buy a put option with a high strike price and write a put with a low strike price.

c. Buy one low strike price call + Buy one high strike price call + Short two middle strike call.

d. Buy a call option with a low strike price and write a call with a high strike price.

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