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A) Define the option trading strategy called butterfly spread, and discuss the corresponding payoffs.? B) In the derivation of the Black-Scholes equation for a European

A) Define the option trading strategy called "butterfly spread", and discuss the corresponding payoffs.?

B) In the derivation of the Black-Scholes equation for a European option, we generally suppose that there are no riskless arbitrage opportunities. Identify the exact point where it is necessary to introduce this fundamental assumption in the derivation of the Black-Scholes equation.

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