Consider three put options on a currency that is currently selling for $1.45. The exercise prices are $1.30, $1.40, and $1.50. The put prices are $0.08, $0.125, and $0.18, respectively. The puts all expire at the same time.

a) Write out the mathematical formula for calculating the profit/loss from this butterfly spread strategy.

b) Plot the profit/loss pattern of all individual options and that of the butterfly spread on the same graph.

c) Determine the value at expiration and the profit when the price of the currency at expiration is $1.26, $1.35, $1.47, and $1.59.

d) Determine the maximum profit and the maximum loss.

e) Use the Goal Seek or Solver tools to find the breakeven currency price at expiration.