Question: A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options

A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options are worth $11, $14, and $18. (a)What is the maximum net gain (after the cost of the options is taken into account)? (b)What is the maximum net loss (after the cost of the options is taken into account)? (c)Assuming the options are all puts, draw the payoff diagram from the individual positions and the overall payoff and profit on the same graph. Please label your graph clearly.

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