Question: Create a BUTTERFLY SPREAD with the following PUT OPTIONS - CREATE AN APPROPRIATE PAYOFF AND PROFIT TABLE CREATE AN APPROPRIATE PAYOFF AND PROFIT GRAPH $33

Create a BUTTERFLY SPREAD with the following PUT OPTIONS - CREATE

Create a BUTTERFLY SPREAD with the following PUT OPTIONS - CREATE AN APPROPRIATE PAYOFF AND PROFIT TABLE CREATE AN APPROPRIATE PAYOFF AND PROFIT GRAPH $33 $40 $47 PUT PRICE $2 $5 $9 1) WHAT SHOULD BE THE STRATEGY TO CREATE BUTTERFLY SPREAD 2) WOULD THE TRADER INITIALLY FACE A CASH INFLOW OR OUTFLOW? HOW MUCH PER SHARE? 3) WHAT ARE THE PAYOFF AND PROFIT TABLE? 4) WHAT ARE THE PAYOFF AND PROFIT GRAPH? 5) AT WHAT STOCK PRICE(S) WOULD THE TRADER OF THIS BUTTERFL EXPECT A POSITIVE PROFIT 6) WHAT IS THE MAXIMUM PROFIT/ MAXIMUM LOSS THAT THE TRADER CAN FACE

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