A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by
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Question:
A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options are worth $11, $14, and $18
a) Build a table showing the payoff and profit of this strategy.
b) What is the maximum profit that the trader can earn by using this strategy?
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