=+18. At time t = 0 an investor bought (long position) one European call with strike K1

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=+18. At time t = 0 an investor bought (long position) one European call with strike K1

=£20 and one European call with strike K2

=£40, she also borrowed (short position) two European calls with strike K3

=£30. All the options are on the same underlying and with the same maturity T.

Such a portfolio is called a butterfly spread. Draw the payoff diagram for this butterfly spread.

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