Question
An investor creates a butterfly spread by trading 9-month call options with strike prices of $115, $125, and $135. The prices of the options are
An investor creates a butterfly spread by trading 9-month call options with strike prices of $115, $125, and $135. The prices of the options are $20.50, $14.50, and $9.50, respectively.
What is the total payoff when the stock price in 9 months is $128?
(Note: Total payoff does not include initial investment)
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Essentials Of Corporate Finance
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
9th International Edition
1259254801, 9781259254802
