First, create a butterfly spread strategy using these options (1) $190 call priced at $8 19 , (2) $200 call priced at $10 15 and (3) $210 call priced at $13 07 Calculate the rate of return (in ), when the underlying stock price becomes $200 (margin of error 1 ) Selected Answer None Given Correct Answer 942 1 Response Feedback Butterfly spread long one $190 call, short two $200 call, long one $210 call Rate of return is profit cost Step by step solution please

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Question: First, create a butterfly spread strategy using these options. (1) $190 call priced at $8.19 , (2) $200 call priced at $10.15 and (3) $210

First, create a butterfly spread strategy using these options. (1) $190 call priced at $8.19 , (2) $200 call priced at $10.15 and (3) $210 call priced at $13.07. Calculate the rate of return (in %), when the underlying stock price becomes $200. (margin of error: +/- 1%)

Selected Answer:	[None Given]
Correct Answer:	942 1%

Response Feedback:

Butterfly spread = long one $190 call, short two $200 call, long one $210 call. Rate of return is profit / cost.

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How can strategies be implemented effectively?