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a.Straddle and butterfly spreads are option combinations. They are popular with investors. Explain the motivation for building the straddle AND butterfly spreads. b.Explain what is

a.Straddle and butterfly spreads are option combinations. They are popular with investors. Explain the motivation for building the straddle AND butterfly spreads.

b.Explain what is meant by put-call parity.

c.State five parameters that influence the price of a European call option on anon-dividend-payingstock, and explain how the change in each would affect the price of the call option.

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