Three put options written on the same stock and with the same maturity have strike prices of $$55,$ $$60,$ and $$65.$ The market prices of the above options are $$3,$ $$5,$ and $$8,$ respectively. What is the profit$/$loss of a butterfly spread constructed using these three options if the stock price at maturity is $$56\mathrm{.}6?$

Question $12$Answer

a$.$

$$8\mathrm{.}40$

b$.$

$$7\mathrm{.}40$

c$.$

$$1\mathrm{.}60$

d$.$

$$0\mathrm{.}60$

e$.$

$-$$$1$