Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1/ Mr. John invested in a reverse butterfly spread using only puts. He received 0.3 as initial investment for each contract. He made a loss
1/ Mr. John invested in a reverse butterfly spread using only puts. He received 0.3 as initial investment for each contract. He made a loss of 1.3 when the stock price in the market is 20.9 and he can reach a maximum gain of 0.3 out of this strategy. The highest put premium in this strategy is 3.05 and the medium strike price is 20.5. Finally, the lowest put premium was 2500 basis points below the medium put premium A/ What was the lowest strike price? b/ What was the lowest strike price? C/ What was the lowest put premium is? D/ What was the medium put premium is? E/ What are the breakeven prices
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started