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3.What are the maximum gains and losses on buying a butterfly spread? Use strike levels of K1 = 100, K2 =110, and K3=120, and trade
3.What are the maximum gains and losses on buying a butterfly spread? Use strike levels of K1 = 100, K2 =110, and K3=120, and trade 400 options; their premiums are P1, P2, and P3. When would you prefer this strategy? Provide 2 reasons.
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