Question: Three call options have the same expiration date and strike prices of $14.00, $18.00, and $22.00. a. Explain how to create a butterfly spread from

Three call options have the same expiration date and strike prices of $14.00, $18.00, and $22.00.

a. Explain how to create a butterfly spread from the above options. Clearly indicate which options should be bought, which ones should be sold, and in what quantities.

b. Calculate payoff of the spread for the underlying asset prices of $11.00, $15.00, and $19.00.

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